ADVANCE CAPITAL I INC, 485BPOS, 2000-05-01

ADVANCE CAPITAL I INC
485BPOS, 2000-05-01

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As filed with the Securities and Exchange Commission on
April 28, 2000
Registration No. 33-13754

FORM N-1A
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X

PRE-EFFECTIVE AMENDMENT NO.
------------
POST-EFFECTIVE AMENDMENT NO. 24 X
------------

and

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X

AMENDMENT 24
---------

ADVANCE CAPITAL I, INC.
- --------------------------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)

One Towne Square, Suite 444, Southfield, Mic 48076
- --------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)

Registrant's Telephone Number, including(248) 350-8543
----------------------------

John C. Shoemaker, President
Advance Capital I, Inc., One Towne Square, Suite 444, Southfield, Mi
- --------------------------------------------------------------------
(Name and Address of Agent for Service)

Approximate Date of Proposed PublicApril 28, 2000
----------------------

It is proposed that this filing will become effective (check appropr
x immediately upon filing pursuant to paragraph (b)

on (date) pursuant to paragraph (b)

60 days after filing pursuant to paragraph (a)(1)

on (date) pursuant to paragraph (a)(1)

75 days after filing pursuant to paragraph (a)(2)

on (date) pursuant to paragraph (a)(2) of rule 485

If appropriate, check the following box:
this post-effective amendment designates a new effective
previously filed post-effective amendment

<PAGE>

ADVANCE CAPITAL I, INC. FUNDS
An investment company with five funds

P.O. BOX 3144
SOUTHFIELD, MI 48037

PROSPECTUS

ADVANCE CAPITAL I FUNDS:

Bond Fund

Retirement Income Fund

Balanced Fund

Cornerstone Stock Fund

Equity Growth Fund

April 28, 2000

THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED
OF THESE SECURITIES. FURTHER, IT HAS NOT DETERMINED THAT THIS PROSPECTUS
IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

ADVANCE CAPITAL I, INC.
An investment company with five funds

<PAGE>
TABLE OF CONTENTS

PAGE
----

INVESTMENTS, RISKS AND PERFORMANCE...............1
Bond Fund...................................1
Retirement Income Fund......................5
Balanced Fund...............................8
Cornerstone Stock Fund.....................11
Equity Growth Fund.........................13

FEES & EXPENSES.................................16

MANAGEMENT, ORGANIZATION & CAPITAL STRUCTURE....17

SHAREHOLDER INFORMATION.........................18
Pricing of Fund Shares.....................18
How to Purchase Shares.....................19
How to Exchange Shares.....................19
How to Redeem Shares.......................19
Restrictions pn Redemptions................20
DIvidends and Distributions................21
Tax Consequences...........................22

FINANCIAL HIGHLIGHTS............................23
<PAGE>

[SIDEBAR]
A WORD ABOUT RISK...

Risk is the possibility that your investment might lose value. When assessing
risk, it is important to remember that the higher the risk of losing money, the
higher the potential reward. As you consider an investment in the funds, you
should also consider your own tolerance for the daily fluctuations in the stock
and bond markets.

BECAUSE OF THE SEVERAL TYPES OF RISK DESCRIBED ON THE FOLLOWING PAGES, YOUR
INVESTMENT IN THE FUNDS, AS WITH ANY INVESTMENT, COULD LOSE MONEY!

A WORD ABOUT BONDS AND INTEREST RATES...

When interest rates rise, bond prices fall. The opposite is also true. Bond
prices go up when interest rates fall. Why do bond prices and interest rates
move in opposite directions? Let's assume that you hold a bond offering a 5
percent yield. A year later, interest rates are on the rise and bonds are
offered with a 6 percent yield. With higher yielding bonds available, you
would have trouble selling your 5 percent bond for the price you paid,
causing you to lower your asking price. On the other hand, if interest rates
were falling and 4 percent bonds were being offered, you would be able to sell
your 5 percent bond for more than you paid.

[END SIDEBAR]

RISK/RETURN SUMMARY:
INVESTMENTS, RISKS, AND PERFORMANCE
The purpose of this section is to provide you with a brief overview of each of
the funds. There is no guarantee that any of the funds will meet its stated
investment objective. Each fund's share price will change based on changes in
the market. Shares may be worth more or less when you sell them than when you
purchased them. The likelihood of loss is greater if you invest for a shorter
period of time. MUTUAL FUND SHARES ARE NOT DEPOSITS OF, OBLIGATIONS OF, OR
GUARANTEED BY ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC,
FEDERAL RESERVE, OR ANY OTHER AGENCY, AND ARE SUBJECT TO INVESTMENT RISK,
INCLUDING POSSIBLE LOSS OF THE ORIGINAL AMOUNT INVESTED.

THE BOND FUND
SEEKS TO PROVIDE INVESTORS WITH THE HIGHEST LEVEL OF CURRENT INCOME WITHOUT
UNDUE RISK OF PRINCIPAL.

PRINCIPAL INVESTMENT STRATEGIES
The fund strives to meet its investment objective by investing in a broad range
of fixed income investments. The portfolio manager looks for investment grade
corporate bonds, securities issued or guaranteed by the U. S. Government and
high-yield, high-risk corporate bonds commonly referred to as "junk bonds".

The fund may, from time to time, invest in high quality, short maturity
securities as a temporary defensive measure. Taking such actions may
cause the fund not to achieve its investment objective.

SECURITY SELECTION
The average weighted maturity of the portfolio securities in the Bond Fund
will be between five and twenty-five years. The fund may invest as much
as 45 percent of the portfolio in lower rated, high-yielding securities,
rated between Ba1 and B2 by Moody's Investors Service, or between BB+ and
B by Standard and Poors. If the quality rating criteria are met at the
time of investment, a later decline in the rating by either or both of
the rating agencies shall not be a violation of the investment policies
of the fund. In the event that a security held by the Bond
Fund is downgraded below B3 by Moody's and B- by S&P, the fund may continue
to hold such security until such time as the investment adviser deems
it advantageous to dispose of the security.

The remaining assets may be invested in preferred stocks, U.S. Government
agency securities, non-U.S. Government agency securities, U.S. Government
obligations and money market instruments. These non-principal investments
are discussed in the Statement of Additional Information (SAI).

When choosing investments, the portfolio manager adheres to the following
policies:
1) The Bond Fund invests at least 65 percent of its total
assets in corporate or U. S. Government bonds.

<PAGE>

2) The Fund can invest as much as 45 percent of the total portfolio
in "junk bonds".
3) The Fund can invest as much as 25 percent of the total portfolio in
mortgage backed securities, backed by the U.S. Government.
4) No more than 50 percent of the fund's assets will be invested in
obligations issued or guaranteed by the U.S. Government.
5) The Fund may hold unrated securities if the portfolio manager
believes that the securities are comparable in investment quality
to the rated securities. However, the Fund will hold no more than 5
percent of the portfolio in unrated securities.
6) In addition to credit ratings, the portfolio manager also uses
credit analysis and security research when choosing bonds.

The portfolio manager looks at the following:
- present and potential liquidity
- capability to generate funds
- profitability
- adequacy of capital

When selling investments, the portfolio manager considers the following:

1) Whether the current market price accurately reflects the credit
worthiness of the company.
2) Whether changes in the industry could have a negative impact on the
company's business or marketing opportunities.
3) Credit ratings which fall below the fund's minimum standards.
4) The possible impact of rising or falling interest rates on bonds
in the fund.

The Bond Fund may adjust the average maturity based on the interest rate
outlook. When interest rates are expected to rise and bond prices fall,
the fund may hold bonds with a shorter average maturity. When rates
are expected to fall and bond prices rise, the fund may hold bonds with
a longer average maturity.

PRINCIPAL RISKS
LIMITED OPERATING HISTORY - The Bond Fund shareholders voted to
change the investment objectives in March 1999. In years prior,
the Bond Fund consisted mainly of investment-grade fixed-income securities.
The fund now includes high-yield, high-risk bonds which make the fund a
more risky investment. Due to the change in objective,
there is little operating or performance history for the fund as it is
now structured.

INTEREST RATE RISK - The Bond Fund is subject to potential
fluctuations in bond prices due to changing interest rates. Since
bonds with longer maturities have greater interest
rate risk than do bonds with shorter maturities, this risk is
possible when investing in the Bond fund.

LOW CREDIT RATING - Issuers of junk bonds are not as strong
financially as those companies issuing investment grade bonds.
Investments in junk bonds are considered to be predominantly
speculative when compared to investment grade bonds. The value
of debt securities may be affected by changing credit ratings.

CREDIT RISK - Whenever the fund purchases a bond, there is the chance
that the issuer will default on its promise to pay interest and/or
principal at maturity. Credit ratings are an attempt to assess this
risk. All things being equal, the lower a bond's credit rating, the
higher the interest the bond must pay in order to attract
investors and compensate them for taking this additional risk.

<PAGE>

CALL RISK - Investment grade and high-yield bonds may contain redemption
or call provisions which, if called during a period of declining interest
rates, may cause the fund to replace the security with a lower yielding
security, resulting in a decreased return for investors.

PREPAYMENT RISK - There is the risk that an investor will receive a
portion of his principal prior to the stated investment's maturity date
and have to invest such proceeds at a lower interest rate. Mortgage
backed securities are subject to prepayment risk.

LIMITED MARKET TRADING - There may be little market trading for particular
bonds, which may adversely affect the Fund's ability to value or sell
the bonds.

WHO SHOULD INVEST?
The BOND FUND may be suitable for you if:
- You want to add a high-risk fixed income fund to your current
portfolio
- You have a long-term time horizon (at least 5 years)
- You are seeking current income rather than growth
- You have a high tolerance for risk and can accept large price
swings

BECAUSE OF THE SEVERAL TYPES OF RISK DESCRIBED IN THIS PROSPECTUS, YOU
COULD LOSE MONEY!

<PAGE>

[SIDEBAR]
A WORD ABOUT PAST PERFORMANCE...

When you see information on a fund's performance, do not consider the
figures to be an indication of the performance you could expect by
making a purchase in the fund today. The past is an imperfect guide
to the future and you should not expect future
performance to be predicted by past performance.

[END SIDEBAR]

INVESTMENT RESULTS
The following information illustrates how the Fund's results may vary
and provides some indication of the risks of investing in the Fund by
showing changes in the Fund's performance from year to year and by
showing how the Fund's average annual
returns for one, five and ten years compare with those of a broad
measure of market performance. PAST PERFORMANCE SHOULD NOT BE USED
TO ATTEMPT TO PREDICT FUTURE PERFORMANCE.

[EDGAR REFERENCE - ADVANCE CAPITAL I, INC. BOND FUND
ANNUAL RETURNS BAR CHART FOR 1990-1999]

The fund's highest/lowest quarterly results during this time period were:
HIGHEST: + 7.3% 2ND QUARTER 1995
LOWEST: - 3.4% 1ST QUARTER 1995

PERFORMANCE SUMMARY
--------------------
AVERAGE ANNUAL RETURNS
FOR YEARS ENDED DECEMBER 31, 1999

- -----------------------------------------------------------------
1 YEAR 5 YEARS 10 YEARS
- -----------------------------------------------------------------
Bond Fund -3.7% 7.1% 7.1%
Lehman Brothers Long
Treasury Index -8.7% 9.1% 8.7%
Lipper Intermediate Bond
Index -1.0% 6.7% 7.1%
Lipper BBB Index -1.1% 7.7% 6.6%
- -----------------------------------------------------------------

LEHMAN BROTHERS LONG TREASURY INDEX - measures the total return on all U.S.
Treasury Bonds with maturities of ten years or longer.

LIPPER INTERMEDIATE BOND INDEX - is made up of the 30 largest mutual funds
that hold at least 65 percent of the total fund assets in investment grade
bonds with a dollar weighted average maturity between 5 and 10 years.

LIPPER BBB INDEX - is made up of the 30 largest mutual funds that hold at
east 65 percent of the total fund assets in corporate or government bonds
with credit ratings in the top four grades.

<PAGE>

THE RETIREMENT INCOME FUND
SEEKS TO PROVIDE INVESTORS WITH A HIGH LEVEL OF INCOME

PRINCIPAL INVESTMENT STRATEGIES
The portfolio manager strives to meet the fund's investment objective by
investing as much as 33 percent of the fund in fixed income securities
which carry a quality rating below investment grade as given by the major
rating agencies such as Standard & Poor's Ratings Service and Moody's Investors
Service, Inc. These low rated securities are commonly referred to as
high-yield, high-risk bonds or "junk bonds".

The Fund may, from time to time, invest in high quality, short maturity
securities as a temporary defensive measure. Taking such actions may
cause the fund not to achieve its investment objectives.

SECURITY SELECTION
The Retirement Income Fund invests at least 65 percent of its total assets in
corporate or U.S. Government bonds. The remaining assets may be invested in
preferred stocks, U.S. Government agency securities, U.S. Government
obligations, and money market instruments. These non-principal investments
are discussed in the SAI.

When choosing investments, the portfolio manager adheres to the
following policies:
1) The fund may invest up to 33 percent of assets in lower rated,
higher yielding securities, rated between Ba1 and B2 by Moody's
or between BB+ and B by S&P at the time of purchase. If the
rating falls after purchase, the fund may still hold the security.
At no time will the fund hold bonds rated below B- by S&P and B3
by Moody's. If a bond's credit rating falls below these minimum
ratings, there is a risk that the portfolio manager will be forced
to sell the bonds at an unfavorable price.
2) No more than 50 percent of the fund's assets will be invested in
obligations issued or guaranteed by the U.S. Government.
3) At least 50 percent of assets will be invested in the following
securities:
- obligations of, or guaranteed by the U.S. Government
or its agencies
- corporate debt or preferred stocks rated Baa3 or higher
by Moody's, or BBB- or higher by S&P
4) The fund may hold unrated securities if the portfolio manager
believes that the securities are comparable in investment quality
to the rated securities. However, the fund will hold no more than
5 percent of the portfolio in unrated securities.
5) The portfolio manager uses credit analysis and security research
in addition to credit ratings when choosing bonds. The portfolio
manager takes into consideration such factors as the following:
- present and potential liquidity
- capability to generate funds
- profitability
- adequacy of capital

<PAGE>

When selling investments, the portfolio manager considers the following:

1) Whether the current market price accurately reflects the credit
worthiness of the company.
2) Whether changes in the industry could have a negative impact on
the company's business or marketing opportunities.
3) Credit ratings which fall below the Fund's minimum standards.
4) The possible impact of rising or falling interest rates on bonds
in the Fund.

The Fund may adjust the average maturity based on the interest rate outlook.
When interest rates are expected to rise and bond prices fall, the fund may
hold bonds with a shorter average maturity. When rates are expected to fall
and bond prices rise, the fund may hold bonds with a longer average maturity.

The Investment Adviser may adjust the quality of bonds held based on current
economic conditions. Any adjustment in the maturity or quality of the
holdings may cause an increase in portfolio turnover resulting in an increase
in expenses. The fund's policies regarding lower rated debt securities can be
changed at any time without shareholder approval.

PRINCIPAL RISKS
INTEREST RATE RISK - The Retirement Income Fund is subject to
potential fluctuations in bond prices due to changing interest rates.
Bonds with longer maturities have greater interest rate risk than do
bonds with shorter maturities.

LOW CREDIT RATING - Issuers of junk bonds are not as strong financially
as those companies issuing investment grade bonds. Investments in junk
bonds are considered to be predominantly speculative when compared to
investment grade bonds. The value of debt securities may be affected
by changing credit ratings.

CREDIT RISK - Whenever the fund purchases a bond, there is the chance
that the issuer will default on its promise to pay interest and/or
principal at maturity. Credit ratings are an attempt to assess this risk.
All things being equal, the lower a bond's credit rating, the higher the
interest the bond must pay in order to attract investors
and compensate them for taking additional risk.

LIMITED MARKET TRADING - There may be little market trading for
particular bonds, which may affect the fund's ability to value
or sell the bonds.

<PAGE>
[SIDEBAR]
A WORD ABOUT PORTFOLIO DIVERSIFICATION...

Portfolio Diversification is the process of buying securities that are
different from each other. In general, the more diversified a fund's
portfolio of securities, the less likely that a specific security's poor
performance will hurt the fund. Each of the Advance Capital I funds is
diversified.

[END SIDEBAR]

WHO SHOULD INVEST?
The RETIREMENT INCOME FUND may be suitable for you if:
- You want to add a high risk fixed income fund to your
current portfolio
- You have a long time horizon (at least five years)
- You are seeking current income rather than growth
- You have a high risk tolerance and can accept large price swings

BECAUSE OF THE SEVERAL TYPES OF RISK DESCRIBED IN THIS PROSPECTUS, YOU
COULD LOSE MONEY!

INVESTMENT RESULTS
The following information illustrates how the fund's results may vary
and provides some indication of the risks of investing in the fund by
showing changes in the fund's performance from year to year and by
showing how the fund's average annual returns for
one and five years and the life of the fund compare with those of a
broad measure of market performance. PAST PERFORMANCE SHOULD
NOT BE USED TO ATTEMPT TO PREDICT FUTURE PERFORMANCE.

[EDGAR REFERENCE - ADVANCE CAPITAL I, INC. RETIREMENT INCOME FUND
ANNUAL RETURNS BAR CHART FOR 1993-1999]

The fund's highest/lowest quarterly results during this time period were:
HIGHEST: + 8.6% 2ND QUARTER 1995
LOWEST: - 3.2% 1ST QUARTER 1994

<PAGE>

PERFORMANCE SUMMARY
--------------------
AVERAGE ANNUAL RETURNS
FOR YEARS ENDED DECEMBER 31, 1999

- ------------------------------------------------------------------
1 YEAR 5 YEARS LIFE OF FUND
(SINCE 1-1-1993)
- ------------------------------------------------------------------
Retirement Income Fund -2.3% 8.4% 7.1%
Lehman Brothers Long
Treasury Index -8.7% 9.1% 7.7%
Lipper BBB Index -1.1% 7.7% 6.6%
- ------------------------------------------------------------------

LEHMAN BROTHERS LONG TREASURY INDEX - measures the total return on all U.S.
Treasury Bonds with maturities of ten years or longer.

LIPPER BBB INDEX - is made up of the 30 largest mutual funds that hold at
least 65 percent of the total fund assets in corporate or government bonds
with credit ratings in the top four grades.

THE BALANCED FUND
SEEKS TO PROVIDE CAPITAL GROWTH, CURRENT INCOME AND PRESERVE CAPITAL THROUGH A
PORTFOLIO OF STOCKS AND FIXED INCOME SECURITIES.

PRINCIPAL INVESTMENT STRATEGIES

The fund strives to reach its investment objective by investing in a mixed
portfolio of stocks and bonds. The fund normally invests 60 percent of
total assets in common stocks and 40 percent in fixed income securities.
The fund may hold a limited amount of cash to be used for redemptions.

SECURITY SELECTION
The Balanced Fund seeks to provide investors with capital appreciation,
current income and preservation of capital by investing in a mix of stocks
and bonds. Equity securities will not represent less than 25 percent of
the portfolio. Fixed income securities may represent as much as 75 percent,
but not less than 25 percent.

The Investment Adviser invests in common stocks of large, established
companies as well as small to mid-size companies that are considered
to have good growth potential. Small companies are considered to
have market capitalization less than $5 billion. Medium-sized companies
are considered to have market capitalization in the range of
companies comprising the S&P Mid Cap 400 Index. Bond and fixed income
investments include U.S. Government and agency securities, investment
grade securities (rated Baa3 or better by Moody's or BBB- or better by
Standard & Poors) and other debt securities.
If a security is downgraded, the fund may hold the security until
such time as the Investment Advisor believes it should be sold.

The Balanced Fund primarily invests in common stocks and investment
grade bonds. Although not principal to the funds objective, the fund
may also invest in other securities including foreign securities,
preferred stocks, obligations issued or
guaranteed by the U.S. Government, stock index futures, money market
instruments, repurchase agreements, options, and convertible debt securities.

The Fund may sell securities for a variety of reasons, such as to secure gains,
limit losses, or redeploy assets into more promising opportunities.

<PAGE>

When considering whether or not to sell investments, the portfolio manager
considers the following:
1) The potential impact of management changes, strategic marketing
opportunities and competition on both the large cap value and small
cap growth stocks in the Fund
2) Whether a securities price is overvalued compared to future
earnings growth
3) The likely impact of rising or falling interest rates on bonds in
the Fund
4) Whether there have been any other fundamental changes in the
current or prospective financial structure or operations of the
company

PRINCIPAL RISKS

PRICE VOLATILITY - The return from the stock portion of the portfolio
will rise and fall with changes in the broad market, a particular
industry, as well as changes in the individual investments. The market
as a whole can decline for many reasons, including adverse political
or economic developments here or abroad, changes in investor psychology,
or heavy institutional selling. The prospects for an industry
or company may deteriorate because of a variety of factors, including
disappointing earnings or changes in the competitive environment. Bond
prices will fluctuate as interest rates and credit ratings change. Share
prices of all companies, even the best managed and most profitable,
can fall for any number of reasons. Some reasons include:

- lower than expected earnings
- increase in interest rates
- overall economic condition
- investor perception

MARKET RISK - The share price of the fund will fluctuate with
changing market conditions. Any investment in the fund may be
worth more or less when redeemed than when purchased.
The Balanced fund should not be relied upon for short-term financial needs.

OBJECTIVE RISK - There is always the chance that returns from the type of
stock selected for a particular fund will trail the returns of the stock
market in general.

STOCKS VS. BONDS - Balanced funds are considered "middle-of-the-road"
investments. Because stocks and bonds can move in different directions,
balanced funds attempt to use the rewards from one type of investment to
offset the risks of another. While the securities in the portfolio tend to
"balance" each other out, investors still face the risk of losing money
when investing. The risks vary depending on the fund's mix of
stocks, bonds, and money market securities. The greater the percent of
stocks, the greater the risk. The fund's bond holdings help to lessen some
of the volatility that the stocks create. Although investors think bonds
are less risky than stocks, there have been times when bond values have
fallen due to rising interest rates. A balanced fund may not be as
greatly affected by interest rate changes as a fund that is made up
entirely of bonds. Also, the fund's balance between stocks and bonds
could limit its potential for capital growth compared to an all-stock fund.

WHO SHOULD INVEST?
The BALANCED FUND may be suitable for you if:
- You want to add a balanced fund to your existing portfolio
- You are looking for a moderate level of growth and a moderate
level of income
- You have a long-term time horizon (at least 5 years)
- You can tolerate the ups and down of movement in the stock and
bond markets

BECAUSE OF THE SEVERAL TYPES OF RISK DESCRIBED IN THIS PROSPECTUS, YOU
COULD LOSE MONEY!

<PAGE>

INVESTMENT RESULTS
The following information illustrates how the fund's results may vary
and provides some indication of the risks of investing in the fund by
showing changes in the fund's performance from year to year and by
showing how the fund's average annual returns for one, five and ten
years compare with those of a broad measure of market performance.
PAST PERFORMANCE SHOULD NOT BE USED TO ATTEMPT TO PREDICT FUTURE
PERFORMANCE.

[EDGAR REFERENCE - ADVANCE CAPITAL I, INC. BALANCED FUND ANNUAL
BAR CHART FOR 1990-1999]

The fund's highest/lowest quarterly results during this time period were:
HIGHEST: + 10.9% 2ND QUARTER 1997
LOWEST: - 12.0% 3RD QUARTER 1990

PERFORMANCE SUMMARY
--------------------
AVERAGE ANNUAL RETURNS
FOR YEARS ENDED DECEMBER 31, 1999
- -----------------------------------------------------------------
1 YEAR 5 YEARS 10 YEARS
- -----------------------------------------------------------------
Balanced Fund 8.4% 17.4% 10.6%
Lehman Brothers Long
Treasury Index -8.7% 9.1% 8.7%
S&P 400 Mid Cap Index 14.7% 23.0% 18.1%
Lipper Balanced Index 9.0% 15.4% 12.3%
- -----------------------------------------------------------------

LEHMAN BROTHERS LONG TREASURY INDEX - measures the total return on all U.S.
Treasury Bonds with maturities of ten years or longer.

S&P 400 MID CAP INDEX - a capitalization weighted index intended to represent
the performance of the mid-range sector of the U.S. stock market.

LIPPER BALANCED INDEX - consists of the 30 largest mutual funds whose primary
investment objective is to conserve principal by maintaining, at all times, a
balanced portfolio of stocks and bonds.

<PAGE>

THE CORNERSTONE STOCK FUND
SEEKS TO PROVIDE INVESTORS WITH LONG-TERM GROWTH OF CAPITAL

PRINCIPAL INVESTMENT STRATEGIES
The fund strives to meet its objective by investing in the common stocks of
large, well established companies. The portfolio manager looks for companies
that have established product lines, solid management and substantial
financial resources. While some companies may pay a dividend, current income
(dividends) is not an objective of the fund. Any income that you earn in this
fund should be considered incidental.

SECURITY SELECTION
The Cornerstone Stock Fund seeks to provide investors with long-term growth
of capital by investing in large, established companies. In general, the
companies will be over $10 billion in market capitalization at the time
of purchase. The Cornerstone Stock Fund invests at least 70 percent of
its assets in common stock, not including stock index futures and options.
Although not principal to the Fund's objective, the Fund may also invest in
other securities including preferred stocks, obligations issued or guaranteed
by the U.S. Government, stock index futures, money market instruments,
repurchase agreements, convertible debt securities, and options.

When considering whether or not to sell investments, the portfolio manager
considers the following:

1) If a company's market capitalization falls significantly and fails
to meet the minimum objectives of a large growth stock
2) Whether a securities price is overvalued compared to future earnings
growth
3) Potential industry consolidations or pressures which may negatively
impact a company's value
4) Whether there have been any other fundamental changes in the current
or prospective financial structure or operations of the company

PRINCIPAL RISKS
LIMITED OPERATING History - The Cornerstone Stock Fund opened in December,
1998. Therefore, there is little operating or performance information
available for this fund.

PRICE VOLATILITY - Share prices of all companies, even the best managed
and most profitable, can fall for any number of reasons. Some reasons
include:
- lower than expected earnings
- increase in interest rates
- overall economic condition
- investor perception

RISK VS. RETURN - Larger companies tend to be more stable than smaller
companies. In addition, they have established product lines, plenty of
financial resources, and a market for their stocks that is very liquid.
This means that there are a lot of investors who are constantly buying
and selling their stocks. It is generally accepted,
however, that the lower the risk of a stock, the lower your
potential return. In addition, as with any stock, you face the risk of
losing money.

<PAGE>

MARKET RISK - The share price of the fund will fluctuate with changing
market conditions. Any investment in the fund may be worth more or less
when redeemed than when purchased. The Cornerstone Stock Fund should
not be relied upon for short-term financial needs.

OBJECTIVE RISK - There is always the chance that returns from the type
of stock selected for a particular fund will trail the returns of the
stock market in general.

WHO SHOULD INVEST?
The CORNERSTONE STOCK FUND may be suitable for you if:
- You want to add a growth fund to your existing portfolio
- You have a long-term time horizon (at least 5 years)
- You want to invest for the growth potential in the stocks of
large companies
- You do not need dividend income
- You can tolerate fluctuations in share price

BECAUSE OF THE SEVERAL TYPES OF RISK DESCRIBED IN THIS PROSPECTUS, YOU COULD
LOSE MONEY!

INVESTMENT RESULTS
The following information illustrates how the fund's results may vary and
provides some indication of the risks of investing in the fund by showing
changes in the fund's performance from year to year and by showing how the
fund's average annual returns for one year and the life of the fund compare
with those of a broad measure of market performance. PAST PERFORMANCE
SHOULD NOT BE USED TO ATTEMPT TO PREDICT FUTURE PERFORMANCE.

[EDGAR REFERENCE - ADVANCE CAPITAL I, INC. CORNERSTONE STOCK FUND
ANNUAL RETURNS BAR CHART FOR 1998*-1999]

* From December 17, 1998 (commencement of operations) to December 31, 1998.

The fund's highest/lowest quarterly results during this time were:
HIGHEST: +18.7% 4TH QUARTER 1999
LOWEST: -3.4% 3RD QUARTER 1999

<PAGE>

PERFORMANCE SUMMARY
-------------------
AVERAGE ANNUAL RETURNS
FOR YEARS ENDED DECEMBER 31, 1999
- ------------------------------------------------------------------
1 YEAR 5 YEARS LIFE OF FUND
(SINCE 12-17-1998)
- ------------------------------------------------------------------
Cornerstone Stock Fund 29.6% N/A 34.1%
S & P 500 index 21.0% N/A 25.1%
- ------------------------------------------------------------------
S & P 500 INDEX - A capitalization weighted index of 500 stocks. The index is
designed to measure the performance of the broad domestic economy through
changes in the aggregate market value of 500 stocks representing all major
industries.

THE EQUITY GROWTH FUND
SEEKS TO PROVIDE INVESTORS WITH LONG-TERM GROWTH OF CAPITAL BY INVESTING
PRIMARILY IN STOCKS OF SMALL AND MID-SIZED COMPANIES

PRINCIPAL INVESTMENT STRATEGIES
The fund strives to reach its investment objective by investing primarily in a
diversified group of small and medium-sized growth companies. Small companies
are considered to have market capitalization less than $5 billion.
Medium-sized companies are considered to have market capitalization between
$5 and $10 billion. The portfolio manager looks for companies that are early
in their development, have new management, new products, or recent structural
changes. You may never have heard of many of these companies. They usually
do not pay dividends. Instead, they reinvest all profits back into the
business to help it grow. Any income earned in this fund should be
considered incidental.

SECURITY SELECTION
The Equity Growth Fund seeks long-term growth of capital by investing
in small and mid-sized growth companies. When picking stocks, the portfolio
manager uses a combination of quantitative models and fundamental research to
select companies with the following characteristics:

- companies that are just starting out but are expected to
grow revenues, earnings and cash flow over time
- companies that have gone unnoticed by the investment community
- companies with capable management, new products, or recent
structural changes

The Equity Growth Fund invests at least 65 percent of its total assets in
common stocks of small and medium-sized growth companies, NOT INCLUDING
stock index futures and options. The Equity Growth Fund invests primarily
in common stocks. Although not principal to the Fund's objectives, the Fund
may also invest in other securities if they offer better returns with less
risk than common stocks alone. These securities include: foreign
securities, preferred stocks, obligations issued and guaranteed by the
U.S. Government, stock index futures, money market instruments, repurchase
agreements, convertible debt securities, and options.

The Fund may sell securities for a variety of reasons, such as to secure
gains, limit losses, or redeploy assets into more promising opportunities.

<PAGE>

When considering whether or not to sell investments, the portfolio
manager considers the following:

1) The potential impact of management changes, strategic marketing
opportunities and competition on the long-term growth prospects
for the company
2) Whether a securities price is overvalued compared to future
earnings growth.
3) How changes in the economy will impact the value of a company's
stock
4) Whether there have been any other fundamental changes in the
current or prospective financial structure or operations of
the company

RELATED RISKS
MARKET RISK - There is always the possibility that stock prices overall
will decline over short or extended periods. Stock markets tend to move
in cycles, with periods of rising stock prices and periods of falling stock
prices. Any investment in the fund may be worth more or less when redeemed
than when purchased. The Equity Growth fund should not be relied upon for
short-term financial needs.

OBJECTIVE RISK - There is always the chance that returns from the type of
stock selected for a particular fund will trail the returns of the stock
market in general.

SMALL AND MID SIZED COMPANIES - Although companies in the Equity Growth
Fund may offer greater opportunity for growth than larger, more established
companies, investments in small companies involve greater risks. Small and
mid-sized companies may lack depth of management, they may be unable to
generate funds necessary for growth or potential development or they may
be developing or marketing new products or services for which
markets are not yet established and may never become established.
Small and mid-sized companies tend to trade less frequently and be
more sensitive to market changes than the market in general. In addition,
these companies may be so small within their
respective industries that they may become subject to intense competition
from larger or more established companies. Finally, smaller growth stocks
can have steep price declines if their earnings disappoint investors.
Since the fund will be significantly invested in this market sector,
investors will be exposed to its volatility.

GROWTH STOCKS - Growth stocks can be volatile for several reasons.
Since they usually reinvest a high proportion of earnings in their
own businesses, they may lack the dividend associated with value stocks
that can cushion their decline in a falling market.
Also, since investors buy these stocks because of their expected superior
earnings growth, earnings disappointments often result in sharp price
declines. In general, stocks with growth characteristics can have
relatively wide price swings as a result of the high
valuations they can carry.

To the extent that the fund invests in foreign securities, it is also
subject to the risk that some holdings may lose value because of declining
foreign currencies or adverse political or economic events overseas.
If the fund uses futures and options, it is exposed to additional volatility
and potential losses.

RISK VS. RETURN - History indicates that small and mid-size company stocks
provide higher returns than those of larger companies, but they also have
greater risk. In comparison to larger, more established companies, smaller
companies tend to:
- Suffer more significant losses
- Be more volatile and somewhat more speculative
- Trade less often
- Offer fewer product lines and have fewer financial resources

<PAGE>

WHO SHOULD INVEST?
The EQUITY GROWTH FUND may be suitable for you if:
- You want to add a growth fund to your existing portfolio
- You have a long-term time horizon (at least 5 years)
- You want to focus on smaller-company stocks
- You do not need, or are not concerned with, dividend income
- You have a high tolerance for risk and can handle large price swings

BECAUSE OF THE SEVERAL TYPES OF RISK DESCRIBED IN THIS PROSPECTUS, YOU
COULD LOSE MONEY!

INVESTMENT RESULTS
The following information illustrates how the fund's results may vary and
provides some indication of the risks of investing in the fund by showing
changes in the fund's performance from year to year and by showing how the
fund's average annual returns for one, five and ten years compare with those
of a broad measure of market performance.
PAST PERFORMANCE SHOULD NOT BE USED TO ATTEMPT TO PREDICT FUTURE PERFORMANCE.

[EDGAR REFERENCE - ADVANCE CAPITAL I, INC. EQUITY GROWTH FUND
ANNUAL RETURNS BAR CHART FOR 1990-1999]

The fund's highest/lowest quarterly results during this time were:
HIGHEST: + 34.1% 4TH QUARTER 1999
LOWEST: - 19.7% 3RD QUARTER 1990

PERFORMANCE SUMMARY
--------------------
AVERAGE ANNUAL RETURNS
FOR YEARS ENDED DECEMBER 31, 1999
- ------------------------------------------------------------------------
1 YEAR 5 YEARS 10 YEARS
- ------------------------------------------------------------------------
Equity Growth Fund 50.1% 27.2% 21.4% *
S&P 400 Mid Cap Index 14.7% 23.0% 18.1%
- ------------------------------------------------------------------------
* Change in Investment Objective -- The investment objective and policies
of the Equity Growth Fund were changed at the end of 1993 and the Fund
became a mid cap growth fund at that time.
- ------------------------------------------------------------------------

S&P 400 MID CAP INDEX - a capitalization weighted index intended to represent
the performance of the mid-range sector of the U.S. stock market.

<PAGE>

[SIDEBAR]
A WORD ABOUT FEES AND EXPENSES?

Fees and expenses are an important consideration when choosing a mutual fund.
That's because you, as a shareholder, pay the costs of operating the fund plus
any transaction cost incurred when buying, selling, or exchanging shares.
These costs can reduce the fund's return. Even small differences in fund
expenses can have a dramatic impact over time. The funds' OPERATING EXPENSES
are:

MANAGEMENT FEES - The percent of fund assets paid to the fund's investment
manager.

DISTRIBUTION FEES - An annual charge ("12b-1") to existing shareholders to
cover the cost of selling shares to new shareholders.

OTHER EXPENSES - Expenses for servicing of shareholder accounts, including
costs for such services as:
- providing statements and reports
- disbursing dividends
- maintaining accounts
- custodial fees
- auditor fees
- providing various other services.

These expenses, which are deducted from a fund's gross income, are expressed
as a percentage of the net assets of the fund. Expenses vary among the funds
for a variety of reasons, including fund size, differences in management fees,
frequency of dividend payments, and average account size.

[END SIDEBAR]

FEES & EXPENSES
All Advance Capital Funds are no-load funds. This means you may purchase
and sell shares in any of these mutual funds without incurring any sales
charges. All the money that you invest in the fund(s) goes to work for you.
The table below shows that you pay no such fees. In addition, the following
table describes the annual fees and expenses that you pay if you buy and hold
shares of the funds.

SHAREHOLDER TRANSACTION EXPENSES
(FEES PAID DIRECTLY FROM YOUR INVESTMENT)
- ----------------------------------------------------------------
MAXIMUM SALES CHARGE (LOAD) IMPOSED ON PURCHASES NONE
MAXIMUM DEFERRED SALES CHARGE (LOAD) NONE
MAXIMUM SALES CHARGE (LOAD) IMPOSED ON REINVESTED DIVIDEND NONE
REDEMPTION FEE NONE
EXCHANGE FEE NONE
- ----------------------------------------------------------------

ANNUAL FUND OPERATING EXPENSES
(EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
- -------------------------------------------------------------------
DISTRIBUTION
MGMT (12B-1) OTHER TOTAL ANNUAL FUND
FEES FEES EXPENSES OPERATING EXPENSES
- -------------------------------------------------------------------
Bond .40% .25% .08% .73%
Retirement
Income .50% .25% .06% .81%
Balanced .70%* .25% .08% 1.03%
Cornerstone
Stock .40% .25% .12% .77%
Equity Growth .70%* .25% .07% 1.02%
- -------------------------------------------------------------------
* T. Rowe Price is paid .2% on average daily net assets up to 100 million
dollars and .15% on average daily net assets over 100 million dollars of the
common stock portion of the Balanced Fund and of the Equity Growth Fund.

EXAMPLE
This example is intended to help you compare the cost of investing in the
Advance Capital Funds with the cost of investing in other mutual funds. This
example assumes that you invest $10,000 in the fund for the time periods
indicated and then redeem all of your shares at the end of those periods.
The example also assumes that your investment has a 5 percent return each
year and that the fund's operating expenses remain the same. Although your
actual costs may be higher or lower, based on these assumptions your costs
would be:

- ------------------------------------------------------------------

1 Year 3 Years 5 Years 10 Years
- ------------------------------------------------------------------
Bond $ 75 $233 $406 $ 906
Retirement Income $ 83 $258 $447 $ 990
Balanced $ 105 $328 $569 $ 1,259
Cornerstone Stock $ 79 $246 $428 $ 954
Equity Growth $ 104 $325 $563 $ 1,248
- ------------------------------------------------------------------

THE AMOUNTS SHOWN IN THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A
REPRESENTATION OF PAST OR FUTURE EXPENSES. THE ACTUAL EXPENSES MAY
BE GREATER OR LESSER THAN THOSE SHOWN.

<PAGE>

PLAN OF DISTRIBUTION
The fund has a Plan of Distribution or "12b-1 Plan" under which it may
finance activities primarily intended to sell shares. Because these fees
are paid out of the fund's assets on an ongoing basis, over time, these
fees will increase the cost of your investment and
may cost you more than other types of sales charges.

MANAGEMENT, ORGANIZATION, & CAPITAL STRUCTURE
INVESTMENT ADVISER

Advance Capital Management, Inc. began serving as Investment Adviser
to Advance Capital I, Inc. in 1987 and currently serves as Investment
Adviser to all of the Advance Capital I, Inc. Funds. Advance Capital
Management, Inc., One Towne Square, Suite 444, Southfield,
MI 48076, is responsible for the day-to-day management of the investment
portfolios and other business affairs. Advance Capital Management, Inc.,
conducts investment research, offers advice and recommendations concerning
each fund's investments, and supplies certain administrative, compliance,
and accounting services to the funds.

SUB-ADVISER
T. Rowe Price Associates, Inc. ("T. Rowe Price"), 100 East Pratt Street,
Baltimore, MD 21202, serves as the Investment Adviser for the common stock
portion of the Equity Growth and Balanced Funds. T. Rowe Price is one
of the largest no-load mutual fund managers in
the nation.

<PAGE>

MANAGEMENT PERSONNEL

- ------------------------------------------------------------------
PORTFOLIO FUNDS MANAGED -
MANAGER BEGINNING DATE
- ------------------------------------------------------------------
John C. Shoemaker Bond - 1987
Advance Capital Management, Inc. Retirement Income - 1993
President Cornerstone Stock - 1998 Balanced - 1987
Equity Growth - 1987
- ------------------------------------------------------------------
Robert J. Cappelli Bond - 1987
Advance Capital Management, Inc. Retirement Income - 1993
Vice-President Cornerstone Stock - 1998
Balanced Fund - 1987
- ------------------------------------------------------------------
Christopher M. Kostiz Bond - 1995
Advance Capital Management, Inc. Retirement Income - 1995
Portfolio Manager Cornerstone Stock - 1998
Balanced(Bonds) - 1995
- ------------------------------------------------------------------
Richard T. Whitney, CFA Equity Growth - 1994
T. Rowe Price Balanced (Stocks) - 1994
Managing Director
- ------------------------------------------------------------------
Donald J. Peters Equity Growth - 1994
T. Rowe Price Balanced (Stocks) - 1994
Vice-President
- ------------------------------------------------------------------
Kristen F. Culp Equity Growth - 1994
T. Rowe Price Balanced (Stocks) - 1994
Vice President
- ------------------------------------------------------------------

Each of the funds has multiple investment advisers ("Adviser Group") who
are jointly and primarily responsible for the day-to-day management of the
Funds portfolios. The Funds' investments are managed by these Adviser
Group(s).

SHAREHOLDER INFORMATION
PRICING OF FUND SHARES
The fund's share price, also called its net asset value, or NAV, is calculated
each business day that the New York Stock Exchange is open, after the close of
trading (generally 4 p.m. Eastern time). The NAV is not calculated on days
when the New York Stock Exchange is closed.

The net asset value is calculated by totaling the assets of the fund,
subtracting all of its liabilities, or debts, and then dividing by the total
number of fund shares outstanding. In calculating the value of total assets,
securities are valued at market price.

Total Assets - Liabilities
----------------------------
Net Asset Value = Number of Shares Outstanding

<PAGE>

The daily net asset value is useful to you as a shareholder because the NAV,
when multiplied by the number of shares you own, gives you the dollar amount
you would have received had you sold all of your shares back to the fund
THAT DAY.

HOW TO PURCHASE SHARES
You may purchase shares in any of the funds by completing an Application
to Purchase Shares. Mail the application and a check payable to Advance
Capital I, Inc. to:

BY REGULAR MAIL: BY OVERNIGHT MAIL:
- ---------------------------- -----------------------
Advance Capital I, Inc. Advance Capital I, Inc.
P.O. Box 3144 One Towne Square, Ste 444
Southfield, MI 48037 Southfield, MI 48076

All purchases must be made in U.S. dollars, and checks must be drawn
on U.S. banks. If you are making a purchase into a retirement account, please
indicate whether the purchase is a rollover or a current or prior year
contribution. Your order will be processed at the next NAV calculated after
your order is received.

When making subsequent purchases, you only need to mail a check noting your
account number and the amount of money to be invested into each fund.

The minimum initial investment in all of the funds is $10,000 (or $2,000
for IRA accounts). This investment may be distributed in any of the funds
as long as a $1,000 minimum investment is maintained in each fund selected.

HOW TO EXCHANGE SHARES
An exchange is the selling of shares of one Advance Capital Fund to purchase
shares of another Advance Capital Fund. Such a transaction may produce a
taxable gain or loss in a non-tax deferred account. You may exchange shares
in writing or by telephone (see "Telephone Requests"). Advance Capital
reserves the right to change these exchange
procedures or required authorizations in the future. You will be given
at least 60 days notice before any changes become effective.

HOW TO REDEEM SHARES
On any business day, you may redeem all or a portion of your shares.
Your order will be processed at the next NAV calculated after your order is
received. Normally, a check for the proceeds from a sale is mailed within
one business day, but in no event, more than seven days. Redemptions
are either made by written instruction or by telephone.

WRITTEN REQUESTS
In order to redeem all or part of your shares from an IRA account, you must
complete an IRA Distribution Form.

<PAGE>

[SIDEBAR]
A WORD ABOUT
SIGNATURE GUARANTEES...

A signature guarantee is a measure designed to protect you from
fraud by assuring that your signature is genuine. The following
financial institutions may guarantee signatures: banks, savings
and loan associations, trust companies, credit unions, and members of the
New York Stock Exchange ("NYSE"). Call your financial institution to see
if they can guarantee your signature. Please note that a signature
guarantee is NOT the same as having your signature notarized by a Notary
Public and the two are not interchangeable.

[END SIDEBAR]

If you are selling shares from a non-IRA account for amounts over $25,000,
you must submit a letter of instruction which has been SIGNATURE GUARANTEED.
The letter must state your name, account number, the name of the fund and the
dollar or share amount you wish to redeem.

In addition, if you would like a check mailed to an address other than the
address of record, the request must be signature guaranteed. This applies to
both IRA and non-IRA accounts.

TELEPHONE REQUESTS
If you wish to redeem less than $25,000 from a non-IRA account, you may
redeem the shares by telephone as long as you authorized "Telephone Redemption
Service" on your initial Application to Purchase Shares. You may redeem shares
by calling (248) 350-8543 or (800) 345-4783 any business day between the hours
8:00 AM and 4:00 PM, Eastern time. If you authorize Telephone Redemption
Service, you authorize Advance Capital Group to:

1) Take instruction from any person by telephone to redeem or
sell shares from your account
2) Take written instruction to redeem an amount of $25,000 or
less regardless of whether or not the request was
signature guaranteed
3) Take instruction from any person by telephone to change your address
4) Take written instruction to change your address regardless of
whether or not the request was signature guaranteed

The Funds and Advance Capital Group will take reasonable precautions to
ensure that any requests made are legitimate. For example, the Funds
and Advance Capital Group will ask for certain personal forms of
identification. If such reasonable precautions are taken, the Fund
and Advance Capital Group will not be held responsible for any
losses resulting from unauthorized transactions. You will receive a
statement each time a telephone exchange is made to confirm that
instructions communicated by telephone are genuine.

RESTRICTIONS ON REDEMPTIONS
FEES:
Advance Capital charges a $50 fee for a 100 percent redemption of an IRA
account. The fee will automatically be taken from the proceeds of the sale.
There is no fee to terminate a non-IRA account.

REDEMPTION IN KIND:
Each fund is obligated to redeem shares in cash up to $250,000 or 1 percent
of the fund's NAV, whichever is less, for any shareholder within the 90 day
period. A redemption above this amount will also be made in cash unless the
Board of Directors determines that additional cash withdrawals will have a
material adverse effect on the remaining shareholders. If this is the case,
the fund will pay all or a portion of the remainder of the distribution in
liquid or readily

<PAGE>

marketable portfolio instruments that the Board of Directors deem fair
and reasonable.

[SIDEBAR]
A WORD ABOUT CASH RESERVES...

Holding "cash" does not mean that the fund literally holds a
stack of currency. Rather, cash reserves refer to short-term,
interest-bearing securities that can easily and quickly
be converted to cash. Most mutual funds keep a small percentage
of assets in cash to accommodate shareholder redemptions.

While some funds strive to keep cash levels at a minimum and to
always remain fully invested in stocks, others allow the investment
advisers to hold up to 20 percent of a fund's assets in cash reserves.

A WORD ABOUT "MARKET TIMING"...

Market timing is the switching of money into investments when you
expect prices to rise, and taking money out when you expect them
to fall. As money is shifted in and out, a fund incurs expenses
for buying and selling of the securities. These costs are borne by
all fund shareholders, including the long-term investors who did not
generate the costs. Advance Capital discourages short-term trading
by closely monitoring daily transactions of its shareholders.

[END SIDEBAR]

Redemption in kind is not as liquid or marketable as cash. If redemption
is made in kind, shareholders may need to sell the securities for less
than their value at the time of redemption and may incur fees associated
with this sale.

REDEMPTION BEFORE CHECKS CLEAR:
When you purchase shares by check, payment of the proceeds may be delayed
until the check clears the bank. Up to 15 calendar days may be allowed
from the purchase date for a check to clear.

ACCOUNTS WITH LOW BALANCES:
Due to the high cost of maintaining accounts with low balances, your shares
may be sold if the total of your combined account balances in all funds
falls below $10,000($2,000 for IRA accounts). Advance Capital could
sell shares of a specific fund if that one fund falls below the $1,000
minimum. Shares will not be sold if the total account balance for
all funds falls below $10,000 ($2,000 for IRA accounts) because of
changes in the net asset values of the funds. Before your shares
are sold, you will be notified in writing and will be allowed 30
days to purchase additional shares to meet the minimum balance.

DIVIDENDS AND DISTRIBUTIONS
As a shareholder, you are entitled to your share of the fund's income from
interest and dividends, and gains from the sale of investments.
You receive earnings as either an income dividend or capital gains
distribution. Income dividends come from the interest the fund
earns from its money market and bond investments as well as
dividends it receives from stock investments. Capital gains
are realized whenever the fund sells securities for a higher price
than it paid for them.

DISTRIBUTION OPTIONS
You can receive distributions in a number of ways:

Reinvestment Dividends and capital gains are automatically
reinvested in additional shares of the fund unless
you request a different distribution method.

Dividends in Cash Dividends are paid by check and mailed to
your address of record, and capital gains are
reinvested in additional shares of the fund.

Capital Gains in Cash Capital gains distributions are paid by check
and mailed to your address of record, and
dividends are reinvested in additional shares
of the fund.

Dividends and Capital Both dividends and capital gains
Gains In Cash distributions are paid by check and mailed
to your address of record.

<PAGE>

[SIDEBAR]
A WORD ABOUT "BUYING A DIVIDEND"...

"Buying a Dividend" is the practice of purchasing shares of a fund shortly
before it makes a distribution. The payment of a cash dividend
decreases a mutual fund's net asset value, thereby returning shares to
you as a taxable distribution.
As an example: If, on December 15th, you invest $5,000 for 250 shares of a
Fund at $20 per share and the Fund pays a distribution of $1 per
share on December 16th, its share price would drop to $19 (ignoring
market changes). You would still have only $5,000 (250 shares times
$19=$4,750 in share value, plus $250 in distributions), but
you would owe tax on the $250 distribution you received (even if you had
reinvested it in more shares). To avoid "buying a dividend," check a
fund's distribution schedule before you invest.

A WORD ABOUT INVESTING FOR THE LONG TERM...

Each fund is intended to be a long-term investment vehicle; none is
designed to provide investors with a means of speculating on short-term
fluctuations in the market.

[END SIDEBAR]

DISTRIBUTION SCHEDULE
- ---------------------------------------------------------------------------
FUND DIVIDENDS PAID CAPITAL GAINS PAID
- ---------------------------------------------------------------------------
Bond Fund Declared daily, paid monthly Declared annually,
paid in December
Retirement Income Declared daily, paid monthly Declared annually,
Fund paid in December
Balanced Fund Declared daily, paid monthly Declared annually,
paid in December
Cornerstone Stock Declared daily, paid in Declared annually,
Fund December paid in December
Equity Growth Declared daily, paid in Declared annually,
Fund December paid in December
- ---------------------------------------------------------------------------

Dividends are not declared on Saturdays, Sundays, or holidays. Dividends are
declared just prior to determining net asset value. Dividends declared on
Fridays and on days preceding holidays are larger to adjust for the fund's
income for the following Saturday, Sunday, or holiday.

TAX CONSEQUENCES
As with any investment, you should consider the tax consequences of investing
in the funds. The following discussion does not apply to tax-deferred
accounts, nor is it a complete analysis of the federal tax implications
of investing in the funds. You may wish to consult your own tax adviser.
Additionally, state or local taxes may apply to your investment, depending
upon the laws where you live.

To avoid taxation, the Internal Revenue Code requires each fund to distribute
net income and any net capital gains realized on its investments. Shareholders
are required to pay federal income tax on any dividends and other distributions
received. This applies whether the dividends are paid in cash or reinvested in
additional shares.

The dividends and short-term capital gains that you receive are taxable to you
as ordinary dividend income. Any distributions of net long-term capital
gains by the fund are taxable to you as long-term capital gains, no
matter how long you've owned shares in the fund. Long-term capital
gains may be taxed at different rates depending on how long the fund
held the securities.

If you sell or exchange shares of the fund, any gain or loss you have is a
taxable event, which means you may have a capital gain to report as
income, or a capital loss to report as a deduction, when you complete
your federal income tax return.

<PAGE>

FINANCIAL HIGHLIGHTS
This table is intended to help you understand each funds' financial
performance for the past 5 years. Information reflects financial
results for a single fund share. The total returns in the table
represent the rate that you would have earned
(or lost) on an investment in the fund (assuming reinvestment of all
dividends and distributions). This information has been audited by
PricewaterhouseCoopers LLP, whose report, along with the fund's
financial statements are included in the annual report, which is
available upon request.

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
BOND FUND 1999 1998 1997 1996 1995
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $10.62 $10.52 $10.37 $10.79 $9.61
------ ------ ------ ------ ------
Income from investment Operations
Net investment income (loss) 0.75 0.67 0.69 0.70 0.70
Net realized & unrealized gain
(loss) on investments (1.04) 0.15 0.24 (0.42) 1.18
------ ------ ------ ------ ------
Total from investment operations (0.29) 0.82 0.93 0.28 1.88
------ ------ ------ ------ ------
Less Distributions
Net investment income (0.75) (0.67) (0.69) (0.70) (0.70)
Net realized gain on investments 0.00 (0.05) (0.09) 0.00 0.00
------ ------ ------ ------ ------
Total distributions (0.75) (0.72) (0.78) (0.70) (0.70)
------ ------ ------ ------ ------
Net asset value, end of year $9.58 $10.62 $10.52 $10.37 $10.79
====== ====== ====== ====== ======
Total Return (%) -3.71 8.12 9.41 2.81 20.15

Ratios and Supplemental Data
Net assets, end of year (in thousands) $34,362 $3,746 $4,203 $4,430 $4,527
Ratio of expenses to average net assets (%) 0.73 0.52 0.54 0.55 0.55
Ratio of net investment income (loss)
to average net assets (%) 6.64 6.35 6.65 6.71 6.80
Portfolio turnover rate (%) 32.43 11.56 21.95 19.77 6.69
</TABLE>

<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
RETIREMENT INCOME 1999 1998 1997 1996 1995
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $10.56 $10.65 $10.20 $10.51 $9.22
------ ------ ------ ------ ------
Income from investment Operations
Net investment income (loss) 0.71 0.73 0.74 0.75 0.76
Net realized & unrealized gain
(loss) on investments (0.95) (0.08) 0.45 (0.31) 1.29
------ ------ ------ ------ ------
Total from investment operations (0.24) 0.65 1.19 0.44 2.05
------ ------ ------ ------ ------
Less Distributions
Net investment income (0.71) (0.73) (0.74) (0.75) (0.76)
Net realized gain on investments 0.00 (0.01) 0.00 0.00 0.00
------ ------ ------ ------ ------
Total distributions (0.71) (0.74) (0.74) (0.75) (0.76)
------ ------ ------ ------ ------

Net asset value, end of year $9.61 $10.56 $10.65 $10.20 $10.51
====== ====== ====== ====== ======
Total Return (%) -2.33 6.20 12.20 4.54 22.96

Ratios and Supplemental Data
Net assets, end of year (in thousands) $209,791 $221,221 $200,511 $170,799 $139,299
Ratio of expenses to average net assets (%) 0.81 0.79 0.82 0.82 0.84
Ratio of net investment income (loss)
to average net assets (%) 7.06 6.87 7.21 7.45 7.64
Portfolio turnover rate (%) 17.89 19.52 16.60 8.34 15.63

</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
BALANCED FUND 1999 1998 1997 1996 1995
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $17.13 $15.69 $13.68 $12.57 $9.97
------ ------ ------ ------ ------
Income from investment Operations
Net investment income (loss) 0.51 0.48 0.45 0.41 0.35
Net realized & unrealized gain
(loss) on investments 0.87 1.56 2.32 1.37 2.75
------ ------ ------ ------ ------
Total from investment operations 1.38 2.04 2.77 1.78 3.10
------ ------ ------ ------ ------
Less Distributions
Net investment income (0.51) (0.48) (0.45) (0.41) (0.35)
Net realized gain on investments (0.98) (0.12) (0.31) (0.26) (0.15)
------ ------ ------ ------ ------
Total distributions (1.49) (0.60) (0.76) (0.67) (0.50)
------ ------ ------ ------ ------
Net asset value, end of year $17.02 $17.13 $15.69 $13.68 $12.57
====== ====== ====== ====== ======
Total Return (%) 8.37 13.15 20.50 14.48 31.53

Ratios and Supplemental Data
Net assets, end of year (in thousands) $169,216 $125,883 $99,421 $75,202 $59,299
Ratio of expenses to average net assets (%) 1.03 1.01 1.04 1.06 1.07
Ratio of net investment income (loss)
to average net assets (%) 2.97 2.92 3.02 3.17 3.11
Portfolio turnover rate (%) 23.76 11.04 10.13 12.79 22.72
</TABLE>

<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------
CORNERSTONE STOCK 1999 1998 *
- -----------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period $10.46 $10.00
------ ------
Income from investment Operations
Net investment income (loss) 0.01 0.00
Net realized & unrealized gain
(loss) on investments 3.09 0.46
------ ------
Total from investment operations 3.10 0.46
------ ------
Less Distributions
Net investment income (0.01) 0.00
Net realized gain on investments 0.00 0.00
------ ------
Total distributions (0.01) 0.00
------ ------
Net asset value, end of period $13.55 $10.46
====== ======
Total Return (%) 29.62 4.60

Ratios and Supplemental Data
Net assets, end of year (in thousands) $52,356 $7,316
Ratio of expenses to average net assets (%) 0.77 0.66 **
Ratio of net investment income (loss)
to average net assets (%) 0.11 1.20 **
Portfolio turnover rate (%) 7.62 0.00
</TABLE>

* From December 17, 1998 (commencement of operations) to December 31, 1998.
** Annualized

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
EQUITY GROWTH 1999 1998 1997 1996 1995
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $20.05 $17.25 $14.72 $12.53 $9.08
------ ------ ------ ------ ------
Income from investment Operations
Net investment income (loss) (0.14) (0.10) (0.09) (0.07) (0.03)
Net realized & unrealized gain
(loss) on investments 10.01 2.90 2.69 2.26 3.48
------ ------ ------ ------ ------
Total from investment operations 9.87 2.80 2.60 2.19 3.45
------ ------ ------ ------ ------
Less Distributions
Net investment income 0.00 0.00 0.00 0.00 0.00
Net realized gain on investments (3.49) 0.00 (0.07) 0.00 0.00
------ ------ ------ ------ ------
Total distributions (3.49) 0.00 (0.07) 0.00 0.00
------ ------ ------ ------ ------
Net asset value, end of year $26.43 $20.05 $17.25 $14.72 $12.53
------ ------ ------ ------ ------
Total Return (%) 50.14 16.23 17.68 17.48 38.00

Ratios and Supplemental Data
Net assets, end of year (in thousands) $114,515 $68,061 $54,332 $38,767 $25,625
Ratio of expenses to average net assets (%) 1.02 1.02 1.07 1.09 1.12
Ratio of net investment income (loss)
to average net assets (%) (0.63) (0.58) (0.58) (0.50) (0.29)
Portfolio turnover rate (%) 36.49 22.34 20.53 24.75 13.86
</TABLE>

<PAGE>

Additional information about Advance Capital, contained in the Statement of
Additional Information, has been filed with the Securities and Exchange
Commission and is available, upon request, without charge by writing to
Advance Capital at the address on page 1 or by calling (248) 350-8543 or
(800) 345-4783. The Statement of Additional Information bears the same
date as this prospectus and is incorporated by reference in
its entirety into this prospectus.

Further, information about the funds' investments is available in the
funds' annual and semi-annual reports to shareholders. In the funds'
annual report, you will find a discussion of the market conditions
and investment strategies that significantly affected the funds'
performance during the last fiscal year.

Finally, information about the funds (including the SAI) can be reviewed
and copied at the Commission's Public Reference Room in Washington, D.C.
You may obtain information on the operation of the public reference room
by calling the Commission at 800) SEC-0330. Reports and other
information about the funds are available on the Commission's Internet
site at http://www.sec.gov. Copies of this information
may be obtained, upon payment of a duplicating fee, by writing the Public
Reference Section of the Commission, Washington, D.C. 20549-6009.

File # 811-05127

<PAGE>

ADVANCE CAPITAL I, INC.
STATEMENT OF ADDITIONAL INFORMATION

APRIL 28, 2000

This Statement is not a Prospectus but should be read in conjunction
with the Funds' current Prospectus dated April 28, 2000. Much of the
information contained in this Statement of Additional Information expands
upon the subjects discussed in the Prospectus. No investment should be
made without first reading the Prospectus. You may receive a copy of the
Prospectus by calling 800-345-4783 or by writing to us at the following
address:

Advance Capital I, Inc.
P.O. Box 3144
Southfield, MI 48037

TABLE OF CONTENTS
-----------------
Page
----
Fund History 2
Fund Description 2
Management 6
Control Persons and Principal Holders of Securities 8
Investment Advisory and Other Services 8
Portfolio Transactions 11
Capital Stock 12
Purchases and Pricing of Shares 13
Taxation of the Funds 13
Calculation of Performance Data 14
Financial Statements 15

<PAGE>

FUND HISTORY
Advance Capital I, Inc. (the COMPANY) was organized on March 6, 1987 as a
Maryland Corporation. The COMPANY is an open-end, diversified, management
investment company offering five distinct portfolios (the FUNDS). The five
portfolios are:

Bond Fund
Retirement Income Fund
Balanced Fund
Cornerstone Stock Fund
Equity Growth Fund

FUND DESCRIPTION

Each portfolio has its own investment objective and policies. The following
policies supplement the investment objectives and policies set forth in the
Prospectus. Each policy applies to all FUNDS. The percentage limitations
included in these policies apply only at the time of purchase. For example,
if a FUND exceeds a limit as a result of market fluctuations or the sale of
other securities, it will not be required to sell any securities.

GOVERNMENT OBLIGATIONS:
Each FUND may invest in obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities. U.S. Government agencies
that are supported by the full faith and credit of the U.S. Government
include securities of the Federal Housing Administration, the Department
of Housing and Urban Developments, the Export-Import Bank, the Farmers
Home Administration, the General Services Administration, the Maritime
Administration, and the Small Business Administration.
Generally less than 50 percent of the Bond Fund, the Retirement Income Fund or
the bonds in the Balanced Fund will be invested in obligations of the U.S.
Government or agencies supported by the full faith and credit of the U.S.
Government. The Equity Growth Fund and the Cornerstone Stock Fund will
have less than 5 percent
of their assets invested in obligations of the U.S. Government or agencies
supported
by the full faith and credit of the U.S. Government except when, in the
opinion of
the Investment Adviser, economic or business conditions warrant a
temporary defensive
investment position.

Each FUND may invest, on a limited basis, in obligations of certain
agencies or
instrumentalities which do not carry the full faith and credit of the
U.S. Government,
such as the Federal National Mortgage Association or the Federal Home
Loan Mortgage
Corporation. Each FUND will invest in the obligations of such agencies or
instrumentalities only when the Investment Adviser believes the credit risk
with
respect to the agency or instrumentality is minimal. No more than 20 percent
of the
assets of the Bond Fund or the bonds in the Balanced Fund will be invested
in these
types of securities. No more than 5 percent of the Equity Growth Fund or the
Cornerstone Stock Fund will be invested in these types of securities.

<PAGE>

MONEY MARKET INSTRUMENTS:
Each FUND anticipates under normal conditions that no more than 20 percent of
its assets will be invested in high-quality money market instruments. Under
unusual market or economic conditions, during the initial start-up phase of a
FUND or for temporary defensive purposes, each FUND may invest up to 100
percent of its assets in money market instruments. Money market instruments
are defined as commercial paper and bank obligations. Bank obligations
include bankers acceptances, negotiable certificates of deposit and
nonnegotiable time deposits earning a specified return
and issued by a U.S. bank which is a member of the Federal Reserve System
or insured by the Federal Deposit Insurance Corporation, or by a savings
and loan association or savings bank that is insured by the Federal Savings
and Loan Insurance Corporation. Investments in bank obligations are limited
to the obligations of financial institutions having more than $2 billion in
total assets at the time of purchase. Investments in commercial paper will
be limited to issues within the highest rating, at the time
of purchase, of S&P or Moody's or, if not rated, are determined by the
Investment Adviser to be of comparable quality.

REPURCHASE AGREEMENTS:
Each FUND may invest in repurchase agreements. Repurchase agreements are
arrangements in which banks, brokers, dealers, and other recognized financial
institutions sell U.S. Government securities (limited to those with remaining
maturities of five years or less) to the FUNDS and agree at the time of sale to
repurchase them at a mutually agreed upon time and price. The FUNDS or their
Custodian will take possession of the securities subject to repurchase
agreements. Repurchase agreements may also be viewed as loans made by
the FUNDS which are collateralized by the securities subject to repurchase.
Advance Capital Management, Inc., the Investment Adviser, will monitor such
transactions to ensure that the value of the underlying securities will be at
least equal at all times to the total amount of the repurchase obligation,
including the interest factor. In the event of a bankruptcy or default of
certain sellers of repurchase agreements, the FUNDS could experience costs
and delays in liquidating the underlying security which is held as collateral,
and the FUNDS might incur a loss if the value of the collateral held declines
during this period.

VARIABLE AND FLOATING RATE INSTRUMENTS:
Unrated variable or floating rate instruments will make up not more than
5 percent of any FUND's assets. These instruments require the Investment
Adviser to monitor closely the earning power, cash flows and other liquidity
ratios of the issuers to insure they can meet payment on demand. These
instruments often provide a higher yield than money market rates because they
are viewed by the issuer and purchaser as longer-term obligations whose pricing
may be based on shorter term rates.

NON-INTEREST-BEARING SECURITIES:
The Bond Fund has not invested in non-income-producing securities in the past.
Further, there are no present plans to invest in non-income-producing
securities in the Bond Fund or the Retirement Income Fund.
Non-income-producing securities include zero coupon bonds, which pay
interest only at maturity and payment in kind ("PIK")
bonds, which pay interest in the form of additional bonds.
Although there are not plans to do so, the Retirement Income Fund
may invest up to 5 percent of its assets in such securities. Should
non-interest-bearing securities be

<PAGE>
held in the Retirement Income Fund, there are special tax considerations
associated with them. The Retirement Income Fund will report interest
on these securities as income even though it receives no cash interest
until the security's maturity or payment date. Therefore, the Retirement
Income Fund may have to dispose of some portfolio securities under
disadvantageous circumstances to generate cash to satisfy
distribution requirements.

STOCK INDEX FUTURES CONTRACT AND OPTIONS:
The Equity Growth Fund, the Balanced Fund and the Cornerstone Stock Fund
(the Growth Portfolios) may enter into stock index futures contracts (or
options thereon) to hedge all or a portion of its equity portfolio, or
as an efficient means of regulating its exposure to the equity markets.
The Growth Portfolios will not use futures contracts
for speculation. The FUNDS will limit the use of futures contracts so
that (1) no more than 5 percent of each of the Growth Portfolios' assets
would be committed to initial margin deposits or premiums on such contracts
and (2) immediately after entering into such contracts, no more than 30
percent of the Equity Growth Fund's total assets or 20 percent of the
Balanced Fund's or Cornerstone Stock Fund's assets would be represented by
such contracts. The Growth Portfolios may also write covered
call options and purchase put options on securities and financial indices.
The aggregate market value of each FUND's portfolio securities covering
call options will not exceed 25 percent of the Equity Growth Fund's net
assets or 15 percent of the Balanced Fund's or Cornerstone Stock Fund's
net assets. Futures contracts and options can be highly volatile and
could reduce each FUND's total return, and a FUND's attempt
to use such investment for hedging purposes may not be successful.
Successful futures strategies require the ability of the Investment Adviser
to predict future movements in securities prices, interest rates and other
economic factors. Each FUND's potential losses from the use of futures
extends beyond its initial investment in such contracts.
Also, losses from options and futures could be significant if a FUND is
unable to close out its position due to disruptions in the market or lack
of liquidity.

FOREIGN SECURITIES
The Equity Growth Fund and Balanced Fund may invest up to 10 percent of
total assets (excluding reserves) in foreign securities. These include
nondollar-denominated securities traded outside of the U.S. and
dollar-denominated securities of foreign issuers traded in the U.S.
(such as ADRs). Such investments increase a portfolio's
diversification and may enhance return, but they also involve some special
risks, such as exposure to potentially adverse local political and economic
developments; nationalization and exchange controls; potentially lower
liquidity and higher volatility; possible problems arising from accounting,
disclosure, settlement, and regulatory practices that differ from U.S.
standards; and the chance that fluctuations in foreign exchange rates will
decrease the investment's value (favorable changes can increase its value).
These risks are heightened for investments in developing countries, and there
is no limit on the amount of the fund's foreign investments that may be made
in such countries. Also, the introduction of the European common currency on
January 1, 1999 could have uncertain adverse effects on currency values.

<PAGE>

FUND POLICIES
The FUNDS are subject to investment limitations. If a percentage
limitation is satisfied at the time of the investment, a later
increase or decrease in the percentage resulting from a change in
the value of a FUND'S portfolio securities will not constitute a
violation. The portfolio manager will determine, based on current
market conditions, when to realign the portfolio within its original
investment limitations. The FUND may be unable to sell certain
securities due to low credit ratings or limited market trading.
The following investment limitations may only be changed with respect to a
particular FUND by a vote of a majority of the the shareholders. This
means the affirmative vote of the lesser of (a) 50 percent of the outstanding
shares of the FUND, or (b) 67 percent or more of the shares of the FUND present
at a meeting if the holders of more than 50 percent of the outstanding shares
of the FUND are represented at the meeting in person or by proxy.

THE FUNDS WILL NOT:

1.) Issue senior securities

2.) Borrow money

3.) Engage in the business of underwriting securities issued by other
people except to the extent that a FUND may technically be deemed
to be an underwriter under the Securities Act of 1933 as amended
in disposing of investment securities

4.) Invest more than 25 percent of each respective FUND's total assets
in any one industry

5.) Purchase or sell commodities futures contracts or invest in oil, gas,
or other mineral exploration or development programs; provided,
however, this shall not prohibit the Equity Growth Fund, the Balanced
Fund, or the Cornerstone Stock Fund from purchasing publicly traded
securities of companies engaging in whole or in part in such activities

6) Purchase or sell real estate, except that each FUND may purchase
securities of issuers which deal in real estate and may purchase
securities which are secured by interests in real estate

7.) Make loans, except that each FUND may purchase or hold debt
securities in accordance with its investment objectives and policies
and may enter into repurchase agreements with respect to obligations
issued or guaranteed by the U.S. Government, its agencies or
instrumentalities

8.) Invest in companies for the purpose of exercising management or control

9.) Invest in bank obligations having remaining maturities in excess of one
year, except that
(1) securities subject to repurchase agreements may have longer m
aturities and

<PAGE>

(2) the Bond Fund, the Retirement Income Fund or the Balanced Fund
may invest in bank obligations without regard to maturity

10.) Purchase securities on margin, make short sales of securities or
maintain a short position

11.) Invest more than 5 percent of its total assets in securities issued by
companies which, together with any predecessor, have been in continuous
operation for fewer than three years

12.) Acquire any other investment company or investment company security
except in connection with a merger, consolidation, reorganization or
acquisition of assets as outlined in the Investment Company Act of 1940

13.) Permit the purchase or retention of the securities of any issuer if
the officers, directors or trustees of the COMPANY, its advisers or
managers owning beneficially more than one-half of 1 percent of the
securities of such issuer together own beneficially more than 5 percent
of such securities

14.) Commit more than 10 percent of their respective net assets to
non-liquid securities, including repurchase agreements with
maturities longer than seven days, or to securities subject to
restrictions on resale

15.) Purchase the securities of any one issuer, other than the U.S.
Government or any of its instrumentalities, if immediately after
such purchase more than 5 percent of the value of its total
assets would be invested in such issuer, except that up to 15
percent of the value of each FUND's total assets may be invested
without regard to the 5 percent limitation

16.) Invest more than 5 percent of each respective FUND's total assets in
securities of issuers that have records of less than three years of
continuous operations

17.) Acquire more than 10 percent of the voting securities of any one issuer

MANAGEMENT OF THE FUND
Advance Capital I, Inc. is managed by a Board of Directors. The Directors are
responsible for managing the company's business affairs and for exercising all
the company's powers except those reserved for the shareholders. Officers
and Directors of the Company, their addresses, and principal occupations
during the last five years, are as follows:

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Positions Principal Occupations
Name and Address & Offices During past 5 Years
- --------------------------------------------------------------------------------
<C> <C> <C>
*John C. Shoemaker Director and President & Director, Advance Capital I,
One Towne Square President Inc.; President, Advance Capital
Suite 444 Management, Inc.
Southfield, MI 48076
Age 54

<PAGE>

- --------------------------------------------------------------------------------
Robert J. Cappelli Vice President President, Advance Capital Services, Inc.;
One Towne Square and Treasurer Vice President & Treasurer, Advance
Suite 444 Capital I, Inc.
Southfield, MI 48076
Age 48

- --------------------------------------------------------------------------------
Charles J. Cobb Vice President Vice President, Advance Capital I, Inc.;
One Towne Square Regional Representative, Advance Capital
Suite 444 Services, Inc.; Controller, Advance Capital
Southfield, MI 48076 I, Inc., Advance Capital Group, Inc.
Age 36

- --------------------------------------------------------------------------------
Kathy J. Harkleroad Secretary Secretary, Advance Capital I., Inc.
One Towne Square Director of Client Services, Advance Capital
Suite 444 Services, Inc.
Southfield, MI 48076
Age 47

- --------------------------------------------------------------------------------
Jospeh A. Ahern Director Attorney and Partner, Stark, Reagan &
3208 E. Breckenridge Finnerty, P.C.
Bloomfield Hills, MI 48301
Age 42

- --------------------------------------------------------------------------------
Richard W. Holtcamp Director Retired General Manager - Marketing,
27 Oyster Rake Lane Michigan Bell Telephone; Director of
Hilton Head Is., SC 29926 Marketing and Consultant, Fishburne & Co.,
Age 65 Inc.

- --------------------------------------------------------------------------------
Harry Kalajian Director Retired Executive Vice President - Finance
2401 Eimen Road & External Affairs, Michigan Bell
Traverse City, MI 49686 Telephone; Treasurer, WTVS Public
Age 68 Television, Channel 56 Detroit; Vice
Chairman, Board of Trustees, Grace
Hospital, Detroit

- --------------------------------------------------------------------------------
Thomas L. Saeli Director Vice President - Mergers and Acquisitions,
1095 Willow Lane Lear Corporation; Vice President,
Birmingham, MI 48009 Oxford Investment Group, Inc.
Age 43
- --------------------------------------------------------------------------------
Frank R. Zimmerman Director Retired President, Illinois Bell Telephone
4291 Maitland Road Company; Director, Executive Service Corp
P.O. Box 87 of Chicago; Director, First Methodist
Acme, MI 49610 Episcopal Aid Society
Age 68
- --------------------------------------------------------------------------------
</TABLE>

*Officers of the Funds are "interested persons" as defined in the Investment
Company Act of 1940.

<PAGE>

CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES

CONTROLLING PERSONS
As of March 31, 2000, no individual owned of record or beneficially 25 percent
or more of any Class of stock or, in any other manner, represents a controlling
interest in the company.

PRINCIPAL HOLDERS OF SECURITIES
As of March 31, 2000, no individual owned of record or beneficially 5 percent
or more of the outstanding shares of a particular class of Shares of the
COMPANY.

PRINCIPAL HOLDERS OF SECURITIES (DIRECTORS AND OFFICERS)
As of March 31, 2000, all directors and officers as a group owned 65,229
Class A Shares (1.4%), 7,497 Class B Shares (0.1%), 10,518 Class C Shares
(.1%), 671 Class E Shares (0%), and 53,178 Class F Shares (1.1%).

INVESTMENT ADVISORY AND OTHER SERVICES

INVESTMENT ADVISER AND SUB-ADVISER
Advance Capital Management, Inc. serves as Investment Adviser to the FUNDS.
Under Asset Manager's Agreements, signed December 21, 1993 and December 17,
1993, T. Rowe Price Associates, Inc. ("T. Rowe Price"), has been hired as a
Sub-Adviser to the Equity Growth and Balanced Funds. These agreements were
approved at a Special Meeting of Shareholders on October 28, 1993. The
principal business address of Advance Capital Management, Inc. is in
Southfield, Michigan. T. Rowe Price is a Maryland Corporation with its
principal business address in Baltimore, Maryland. Subject to the general
supervision of the COMPANY's Directors and in accordance with each FUND's
investment objectives and policies, the Investment Adviser continually
conducts investment research and furnishes an investment program for each
of the FUNDS and the COMPANY, is responsible for the purchase and sale of
each FUND's portfolio securities and maintains the COMPANY's records relating
to such purchases and sales.

The Investment Advisory Agreement provides that the Investment Adviser
shall not be held liable for any error of judgment or mistake of law or
for any loss suffered by the COMPANY in connection with the performance
of the Investment Advisory Agreement, except a loss resulting from a
breach of fiduciary duty with respect to the receipt
of compensation for services or a loss resulting from willful misfeasance,
bad-faith, or gross negligence on the part of the Investment Adviser in the
performance of their duties or from reckless disregard by them of their
duties and obligations thereunder.

The Investment Adviser has agreed to pay certain expenses, including the fees
associated with hiring of a Sub-Adviser, incurred in connection with its
activities under the Investment Advisory Agreement other than the cost of
securities, including brokerage commissions, purchased for the COMPANY.
Specifically, the Investment Adviser will pay for (a) the salaries and
employment

<PAGE>

benefits of all its employees who are engaged in providing these services, (b)
adequate office space and suitable office equipment for such employees, (c) all
telephone and postage costs relating to
such functions.

For services provided and expenses assumed pursuant to the Investment Advisory
Agreement, the Investment Adviser receives a fee, computed daily and paid
monthly, at the annual rate of .7 percent of the average daily net assets of
the Equity Growth Fund and the Balanced Fund, .4 percent of the average daily
net assets of the Bond Fund and Cornerstone Stock Fund and .5 percent of the
average daily net assets of the Retirement Income Fund. The Sub-Advisory
Agreements do not provide for any increase in the level of fees payable by
the COMPANY. For its services, the Sub-Adviser is paid a fee by the
Investment Adviser, payable over the same time periods and calculated in
the same manner as the investment advisory fee, of .2 percent on the average
daily net assets up to 100 million dollars and .15% on average daily net
assets over 100 million dollars of the Equity Growth Fund and of that
portion of the Balanced Fund so designated by the Investment Adviser to be
invested in common stocks. From time to time, as it may deem appropriate
in its sole discretion, the Investment Adviser may waive a portion or all
of its advisory fee.

If the expenses borne by any FUND in any fiscal year exceed expense limitations
imposed by applicable state regulations, Advance Capital Management, Inc. will
reimburse the COMPANY for a portion of any such excess to the extent required
by such regulations up to the amount of fees payable to it or it may effect
such reimbursement regardless of the fees payable to it. Such amount,
if any, will be estimated, reconciled and paid on a monthly basis.

12B-1 AND DISTRIBUTION PLAN
Expenses of the COMPANY may include distribution-related expenses which the
COMPANY is permitted to bear under a Plan of Distribution complying with
the provisions of Rule 12b-1 under the Investment Company Act of 1940.
Such Plan was approved by the Board of Directors, including a majority of
the Directors who are not interested persons of the COMPANY and who have no
direct or indirect financial interest in the operation of the Plan.
Under the Plan, up to .25% of each FUND's average daily net
assets, for any fiscal year, may be expended for preparation, reproduction, and
distribution of sales literature and prospectuses used for sales purposes;
public relations and communications with investors and prospective investors;
and compensation of sales personnel.

Under the Distribution Agreement, each FUND is authorized to reimburse
the Distributor for its activities (which are the same as those authorized
by the Plan) on behalf of each FUND on a monthly basis, provided that any
payment by a FUND to Distributor, together with any other payments made by
such FUND pursuant to the Plan, shall not exceed .02083 percent of its average
daily net assets for the prior month (.25 percent on an annualized basis).

The plan was initially approved on July 17, 1987, by the Directors
of the COMPANY, including a majority of the Directors who were not
"interest persons" (as defined in the 1940 Act) of the COMPANY and
who had no direct or indirect financial interest in the operation
of the Plan or in any agreement related to the Plan (the Qualified
Directors). In approving the Plan, the Directors

<PAGE>

determined that the Plan was in the best interest of the shareholders
of each FUND. At the first Annual Meeting of Shareholders held on
July 22, 1988 for the shareholders of the Equity Growth, Bond and
Balanced Funds and July 23, 1993 for the shareholders
of the Retirement Income Fund, the Plan of Distribution was approved.
A modification of the plan to reduce the aggregated fees charged
under the plan to .25 percent annually, was approved by the Board of
Directors on April, 24, 1992. During the fiscal year ended
December 31, 1999, the COMPANY paid or accrued distribution
expenses of $198,486, $24,270, $357,447, $67,958, and $545,626 for
the Equity Growth, Bond, Balanced, Cornerstone Stock and Retirement
Income Funds, respectively, the COMPANY's distributor, Advance Capital
Services, Inc.

ADMINISTRATOR AND TRANSFER AGENT
Advance Capital Group, Inc., located at One Towne Square, Suite 444,
Southfield, Michigan, 48076, serves as the COMPANY's Administrator and
Transfer Agent. Under the Administration and Transfer Agent Agreement,
Advance Capital Group, Inc. as Administrator agrees to maintain office
facilities for the COMPANY, furnish the COMPANY with statistical and
research data, clerical, accounting, and bookkeeping services, and certain
other services required by the COMPANY, and to compute the
net asset value, net income and realized capital gains or losses, if any,
of the respective FUNDS. The administrator prepares semi-annual reports
to the Securities and Exchange Commission, prepares federal and state tax
returns, prepares filings with the state commissions, maintains financial
accounts and records and generally assists in all aspects of the COMPANY's
operations. Advance Capital Group, Inc., acting in its capacity as
Transfer Agent, arranges for and bears the cost of
processing share purchase and redemption orders, maintains shareholder record
accounts and serves as dividend disbursing agent, with duties involving
calculation of dividends and capital gains distributions, issuing dividend
and capital gains payment records. The Transfer Agent is also responsible
for preparing and mailing to shareholders periodic account statements,
federal tax information, daily confirmations of transactions in FUND shares.
In addition, the Transfer Agent will respond to telephone and mail inquiries
concerning the status of shareholder accounts.

CUSTODIAN
Fifth Third Bank, located at 38 Fountain Square Plaza, Cincinnati, Ohio 45263,
is "Custodian" of the COMPANY's assets. Under the custodian agreement,
Fifth Third has agreed to a) maintain separate accounts in the name of the
COMPANY; b) make receipts and disbursements of money on behalf of the COMPANY;
c) collect and receive all income and other payments and distributions on
account of the COMPANY's portfolio securities; d) respond to correspondence
from securities brokers and others relating to its duties; e) maintain
certain financial accounts and records; f) make periodic
reports to the COMPANY's Board of Directors concerning the COMPANY's
operations. Under the custodian agreement, Custodian is entitled to monthly
fees for furnishing custodial services and is entitled to reimbursement for
its out of pocket expenses in connection with the above services.

INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP, with offices at 203 North LaSalle Street,
Chicago, Illinois 60601 serves as independent accountants for the COMPANY.
The financial highlights and financial statements of the COMPANY included
in the Prospectus and Statement of Additional

<PAGE>

Information, respectively, have been audited by PricewaterhouseCoopers LLP,
whose report is also included herein.

COUNSEL
Butzel Long, 150 West Jefferson, Suite 900, Detroit, Michigan 48226, are
counsel to the COMPANY and will pass upon the legality of the Shares offered
in the Prospectus.

PORTFOLIO TRANSACTIONS
The Investment Adviser and Sub-Adviser are responsible for, make decisions
with respect to, and place orders for all purchases and sales of portfolio
securities.

Transactions on U.S. stock exchanges involve the payment of negotiated
brokerage commissions. On exchanges on which commissions are negotiated,
the cost of transactions may vary among different brokers.

Transactions in the over-the-counter market are generally principal
transactions with dealers and the costs of such transactions involve
dealer spreads rather than brokerage commissions. With respect to
over-the-counter transactions, the COMPANY,
where possible, will deal directly with the dealers who make a market
in the securities involved, except in those circumstances where better
prices and execution are available elsewhere.

The Investment Advisory Agreement between the COMPANY and the Investment
Adviser and the Asset Manager's Agreement between the Investment Adviser
and the Sub-Adviser, both provide that, in executing portfolio
transactions and selecting brokers or dealers, the Investment Adviser
and Sub-Adviser will seek to obtain the best net price and the
most favorable execution. The Investment Adviser and Sub-Adviser
will consider factors deemed relevant, including the breadth of the
market in the security, the price of the security, the financial
condition and execution capability of the broker or dealer,
and the reasonableness of the commission, if any for the specific
transaction and on a continuing basis. In addition, the Investment
Advisory Agreement authorizes the Investment Adviser, to the extent
permitted by law and subject to the review of the
COMPANY's Board of Directors, from time to time, with respect to the
extent and continuation of this policy, to cause any of the FUNDS to
pay a broker-dealer which furnishes brokerage and research services
at a higher commission than that which might be charged by another
broker-dealer for effecting the same transaction. This
is allowed when the Investment Adviser determines, in good faith,
that such commission is reasonable in relation to the value of the
brokerage and research services provided by such broker-dealer,
viewed in terms of either the particular transaction or the
overall responsibilities of the Investment Adviser, to the accounts
to which it exercises investment direction. Such brokerage and
research services may consist of reports and statistics on specific
companies or industries, general summaries of groups of stocks and
their comparative earnings, yields or broad overviews of the
stock market and the economy.

Supplementary research information so received is in addition to and not
in lieu of services required to be performed by the Investment Adviser
or Sub-Adviser and does not reduce the investment advisory fee payable
to the Investment Adviser by the COMPANY. Such

<PAGE>

information may be useful to the Investment Adviser or Sub-Adviser in
servicing both the COMPANY and other clients, and, conversely,
supplemental information obtained by the placement of business of
other clients may be useful to the Investment Adviser or
Sub-Adviser in carrying out its obligations to the COMPANY.

The COMPANY has authorized the Investment Adviser to place brokerage orders
with some brokers who distribute the COMPANY's Shares. The Investment Adviser
will do so only when it reasonably believes that the commissions and the
transaction quality are comparable to that available from other qualified
brokers.

Portfolio securities will not be purchased from, or sold to, the
Investment Adviser, the Sub-Adviser, the Distributor or any affiliated
person of any of them (as such term is defined in the 1940 Act) acting
as principal, except to the extent permitted by the Securities and
Exchange Commission.

PORTFOLIO TURNOVER
Portfolio Turnover is the practice by mutual funds of buying and
selling securities within funds. Before investing in a mutual fund,
you should review its portfolio turnover rate for an indication of
the potential effect of these transaction costs on the fund's future
returns. Typically, the greater the volume of buying and selling
by the fund, the greater the impact that brokerage commissions and
other transaction costs will have on its return. Also, funds with
high portfolio turnover rates (100% or more) may be more likely than
low-turnover funds to generate capital gains that
must be distributed to shareholders as taxable income.
The average turnover rate for
all domestic stock funds is about 80 percent.

CAPITAL STOCK AND OTHER SECURITIES
Advance Capital I, Inc. shares are currently classified into five classes
of shares, each representing interest in one of five separate investment
portfolios. Class A common shares represent interests in the Equity Growth
Fund, Class B common shares represent interests in the Bond Fund, Class C
common shares represent interest in the Balanced Fund, Class E common
shares represent interests in the Retirement Income Fund,
and Class F common shares represent interests in the Cornerstone Stock Fund.

Each share is entitled to such dividends and distributions out of the income
earned on the assets belonging to such FUND as are declared at the discretion
of the Board of Directors.

Shareholders are entitled to one vote for each full share held, and
fractional votes for fractional shares held, and will vote in the aggregate
and not by class, except as otherwise expressly required by law, or when the
matter to be voted upon affects only the interest of the shareholders of a
particular class. At such time, shares of capital stock of the COMPANY shall
be voted by individual class and only shares of capital stock of the
respective class or classes affected by a matter shall be
entitled to vote on such a matter. The approval of an investment company
agreement or any change in a fundamental investment policy would be
effectively acted upon with respect to a FUND only if approved by a
majority of the outstanding shares of such FUND. Also, the ratification
of the appointment of independent public accountants, the approval of

<PAGE>

principal underwriting contracts, and the election of directors may be
effectively acted upon by shareholders without regard to class.

Shares have no preemptive rights and only conversion or exchange rights
as the Board of Directors allows. When issued for payment, the COMPANY's
shares will be fully paid and non-assessable. In the event of a liquidation
or dissolution of the COMPANY or an individual FUND, shareholders of a
FUND are entitled to receive the assets available
for distribution belonging to the particular FUND, and a proportionate
distribution of any general assets of the COMPANY not belonging to any
particular FUND which are available for distribution.

The Board of Directors is authorized, with shareholder approval, to
(a) sell all assets of a FUND at net asset value for consideration
involving cash or securities and transfer to another management
investment company (b) sell and convert the FUND's assets into cash
and cause all shares of the FUND to be redeemed at net asset
value (c) combine the assets belonging to a FUND with the assets
belonging to another FUND as long as the Board of Directors determines
that such combination will not have a material adverse effect on
shareholders of any FUND participating in such combination.

PERSONAL INVESTMENT ACTIVITIES
Advance Capital I, Inc. (the Funds), Advance Capital Group, Inc.,
Advance Capital Management, Inc. and Advance Capital Services, Inc. operate
under a Code of Ethics (the Code) which applies to all Directors,
Officers and employees of Advance Capital. The Code permits these
persons to invest in securities for their own accounts.
Certain persons are required to obtain written approval from the
Compliance Officer of the Funds prior to the purchase or sale of a security.
The Code of Ethics is on file with the Securities and Exchange Commission.
You may receive a copy of the Code by calling the Commission at
(800) SEC-0330.

PURCHASE AND PRICING OF SHARES
Shares may be purchased in any of the FUNDS by completing an
Application to Purchase Shares. The Application and a check
made payable to Advance Capital I, Inc. can be
mailed to the Southfield, MI address located on the cover of this Statement.

Securities are valued at market value, or if a market quotation is not readily
available, at their fair market value. The net asset value is calculated by
adding up the total assets of the FUND, subtracting all of its liabilities,
or debts, and then dividing by the total number of FUND shares outstanding.

Total Assets - Liabilities
-----------------------------
Net Asset Value = Number of Shares Outstanding

<PAGE>

TAXATION OF THE FUND
The Internal Revenue Code of 1986 treats each FUND in a series mutual
fund as a separate corporation. Each FUND intends to qualify each year as a
"regulated investment company" under Subchapter M on the Internal Revenue
Code of 1954. The company intends to distribute to shareholders of each
FUND all capital gains and income earned.

Unless otherwise exempt, shareholders are required to pay federal income
tax on any dividends and other distributions received. This applies
whether dividends are received in cash or as additional shares. Information
on the tax status of dividends is provided annually.

At the time of your purchase, the FUND's net asset value may reflect
undistributed income or capital gains or unrealized appreciation of
securities held by the FUND. A subsequent distribution to you of
such amounts, although constituting a return
of your investment, would be taxable as described above.

PERFORMANCE INFORMATION
AVERAGE ANNUAL TOTAL RETURN
From time to time, each FUND may state its total return in advertisements
and other types of literature. Any statements of total return performance
data will be accompanied by information on the FUND's average annual
compounded rate of return over the most recent 1 year period or life of
the FUND.

Each FUND's average annual compounded rate of return is based on a
hypothetical $1,000 investment that includes capital appreciation
and depreciation during the stated periods. The following formula
will be used for the actual computations:

P(1+T)n = ERV

Where: P = a hypothetical initial purchase order of $1,000 from which the
maximum sales load (0) is deducted.

T = average annual total return
n = number of years
ERV = redeemable value of the hypothetical $1,000 purchase
at the end of the period

Aggregate total return is calculated in a similar manner, except that the
results are not annualized.

The performance of each of the FUNDS, as shown below, is the average annual
return for the FUNDS for the periods listed. Security prices fluctuate
during the period covered and past results should not be considered
representative of future performance.

<PAGE>

AVERAGE ANNUAL RETURN

1 YEAR 5 YEARS 10 YEARS LIFE OF FUND

- ------------------------------------------------------------------------------

Bond Fund -3.7% 7.1% 7.1% 7.5%
Retirement Income Fund -2.3% 8.4% N/A 7.1%
Balanced Fund 8.4% 17.4% 10.6% 10.0% **
Cornerstone Stock Fund 29.6% N/A N/A 34.1%
Equity Growth Fund 50.1% 27.1% 21.4% 21.4% *
- ------------------------------------------------------------------------------
*Effective December 29, 1993, the investment objectives of the Equity Growth
Fund were changed by shareholder vote and T. Rowe Price Associates, Inc.
became the investment sub-adviser with the primary responsibility for the
daily security investment decisions.

**Effective December 29, 1993, T. Rowe Price Associates, Inc. became the
investment sub-adviser with the primary responsibility for the daily equity
security investment decisions for the Balanced Fund.

YIELD QUOTATION
Directions: Based on a 30 day (or one month ) period ended on the date of the
most recent balance sheet included in the registration statement, calculate the
Fund's yield by dividing the net investment income per share earned during the
period by the maximum offering price per share on the last day of the period,
according to the following formula:

YIELD = 2(a-b/cd +1)6 - 1

Where:
a = dividends and interest earned during the period
b = expenses accrued for the period (net of reimbursements)
c = the average daily number of shares outstanding during
the period that were entitled to receive dividends
d = the maximum offering price per share on the last day of the
period

FINANCIAL STATEMENTS
The following is attached:

(1) Annual Report for year ended December 31, 1999. The annual report
includes: Investment Performance, Financial Highlights, Portfolio of
Investments, Statements of Assets and Liabilities, Statement of Operations,
Statement of Changes in Net Assets, Notes to Financial Statements, the
Independent Accountants' Report, and Additional Information.

<PAGE>
ANNUAL REPORT

December 31, 1999

ADVANCE CAPITAL I, INC.
An investment company with five funds

<PAGE>

TABLE OF CONTENTS
- --------------------------------------------
Page
A Letter to Our Shareholders..............1
Investment Performance....................3
Financial Highlights.....................12

PORTFOLIO OF INVESTMENTS
Equity Growth Fund...............17
Bond Fund........................22
Balanced Fund....................27
Retirement Income Fund...........40
Cornerstone Stock Fund...........48

Statement of Assets and Liabilities......50
Statement of Operations..................51
Statement of Changes in Net Assets.......52
Notes to Financial Statements............55
Report of Independent Accountants........59
Additional Information...................60

<PAGE>

Dear Shareholders,

From the White House to Wall Street, the stories that
filled the news headlines over the past year have left a lasting
impression on America's culture. History won't soon forget, for
instance, the impeachment trial or the potential catastrophic
impact that Y2K computer glitches promised, but didn't deliver.
Foreign markets, especially Asia and Russia were digging themselves
out of a devastating economic collapse while genocide gripped the
Balkans. All the while, the longest running U.S. economic expansion
showed little sign of slowing. The underlying fundamentals of
moderate inflation, high consumer confidence and robust corporate
earnings thrust equity values into the stratosphere while fixed
income securities languished amid fears of possible future inflation.
Driving the growth has been the explosion of technology surrounding
the Internet. A plethora of dot-com companies unveiled the latest
technology gizmos to make our lives easier and information more
accessible than ever dreamed possible just a few years ago.

Free flowing capital, which has been the bedrock of our
current economic boom, would not have been possible without tough
political and financial decisions engineered by past generations.
The United Nations, for instance, was organized after the catastrophes
of W.W. II. A solid financial system, which included the inception of
the Securities and Exchange Commission, was put into place after the
devastating effects of the Great Depression. The Cold War ended by
the early 1990's with a massive nuclear arms reduction and in 1997
the U.S. posted its first budget surplus in more than thirty years.
The foresight of past generations to develop long term solutions to
enormous problems has produced in the longest economic expansion on
record, the lowest unemployment rate in thirty years, low inflation
and general peace throughout the world. Fostering the growth of
capitalism has propelled the entrepreneurial spirit and funded the
advancements in technology which has reshaped business and personal
communications.

"The wave of the future is coming and there is no fighting it."
(Anne Morrow Lindbergh). This quote rings particularly true in the fast
paced world of new technology inventions. The explosion of Internet
startups and their IPOs have catapulted many companies into multi-billion
dollar entities, some in a few short weeks. Investors are stuck between
justifying astronomical stock valuations or missing out on a possible
fundamental shift in consumer and business demand for products. This
dynamic environment has kept industry leaders such as Microsoft, Intel
and Lucent under pressure to remain innovative and flexible or risk losing
market share to smaller startups.

The red-hot technology sector coupled with solid economic
fundamentals and seemingly insatiable consumer demand has propelled
the equity markets to record highs. The technology loaded NASDAQ
100 returned 101 percent for the year, while the S&P 500 was up
21 percent. Fixed income securities with long maturities were hit
hard all year as a stellar economy kept inflationary fears
high and interest rates on the rise. The Equity Growth Fund increased 50.1
percent for the year while the S&P MidCap Index increased 14.7 percent. The
Balanced Fund with its 60-40 mix of stocks and bonds, increased 8.4 percent
compared to a 9.0 percent increase in the Lipper Balanced Fund Index. The
Bond and Retirement Income Funds returned -3.7 percent and -2.3 percent,
respectively, compared to the Lipper BBB Bond Index return of -1.1 percent.
The Cornerstone Stock Fund returned 29.6 percent compared to the S&P 500
Index which returned 21.0 percent.

<PAGE>

Looking ahead it is difficult not to be very cautious about the short
run, but long run fundamentals remain solid. Several years ago, a select few
on Wall Street were touting a "New Era of Investing" in which the equity
markets would remain robust for an extended period of time. Their thesis
was based upon an aging baby boom generation flush with cash and the
determination to spend or invest it. In addition, they theorized,
that the technology boom would continue to expand worker productivity
while reducing costs and increasing the profitability of corporations.
Also, a shift toward more service related jobs from the often volatile
manufacturing sector would defray the dreaded business cycle effect on
the economy. While we do not flatly accept that equity values will rise
indefinitely, credible evidence suggests an extended economic boom with
relatively low inflation and near full employment should continue unless
an unexpected shock should befall the economy.

The most immediate concern remains the inflationary effect of full
employment, rising oil prices and unprecidented consumer demand. After three
rate increases in 1999, the Federal Reserve remains poised to push rates higher
if economic growth continues on its torrid pace. Higher rates have already
hurt bond returns and the stock market could be in for a rough ride in the
year ahead if rates creep any higher. As with any forecast scenario, there
are many unknowns and a virtually infinite number of outcomes. Our current
financial path, however, makes it difficult to be anything other than
extremely cautious about stocks for the year. Bonds we expect will
provide positive total returns for the new year.

At December 31, 1999, the five Advance Capital I, Inc. Funds held just
over $580 million in total assets, about 36 percent more than the prior year.
Our focus has been and will remain on the long term. Intelligent investment
decisions, broad diversification and control of costs comprise the
cornerstones of our investment philosophy. We fully expect this approach will
continue to serve our investors well over time. We thank you for your
continued confidence and look forward to providing you with service and
results designed to meet or exceed your long term investment objectives.
If you have questions or if we may be of service, please call us. We
appreciate the opportunity to answer your questions or to discuss financial
or investment matters that may be of interest to you. Our toll-free number
is (800) 345-4783.

Sincerely,

/s/ John C. Shoemaker /s/ Robert J. Cappelli
John C. Shoemaker Robert J. Cappelli

February 7, 2000

<PAGE>

INVESTMENT PERFORMANCE

ADVANCE CAPITAL I, INC. IS AN OPEN-END, DIVERSIFIED MANAGEMENT
INVESTMENT COMPANY OFFERING INVESTMENT OPPORTUNITIES IN FIVE
MUTUAL FUND PORTFOLIOS.

1999 FUND RESULTS
<S> <C>
Equity Growth 50.1%
Balanced 8.4%
Bond -3.7%
Retirement Income -2.3%
Cornerstone Stock 29.6%

</TABLE>

The accompanying comments are intended to help investors
evaluate the dynamics of mutual fund performance. The charts and
tables that follow show the average annual return of each Fund as
well as selected measures of general stock and bond market returns.
The Consumer Price Index (CPI) is also shown to illustrate the
impact inflation has on investment returns.

Figures for the life of the Balanced and Bond Funds begin
August 31, 1987. The figures for the Bond Fund reflect a
substantial change in objectives on March 9, 1999. The Retirement
Income Fund figures begin on January 1, 1993, the start date for
the Fund. The historical figures for the Equity Growth Fund begin
January 1, 1994. Figures for the Cornerstone Stock Fund begin on
December 17, 1998, the start date for the Fund.

THE EQUITY GROWTH FUND IN 1999

THE ADVANCE CAPITAL I EQUITY GROWTH FUND SEEKS LONG-TERM GROWTH
OF CAPITAL BY INVESTING PRIMARILY IN COMMON STOCKS OF SMALL,
RAPIDLY GROWING COMPANIES.

TOP FIVE INDUSTRIES
<S> <C>
Computer Software 17.0%
Semiconductor 8.4%
Retail Store 5.9%
Computer Peripheral 5.9%
Broadcasting/Cable TV 6.0%

</TABLE>

The Equity Growth Fund returned 50.1 percent in 1999 while
the S&P 400 Mid Cap Index returned 14.7 percent and the Lipper
Mid Cap Growth Index returned 73.7 percent. The accompanying graph
shows the cumulative performance of the Equity Growth Fund, the
Lipper Mid Cap Growth Index, the S&P 400 Mid Cap Index and the
Consumer Price Index (CPI) since the beginning of 1994.

Despite several financial obstacles, investors remained
upbeat about stocks through most of 1999. The first part of the
year brought uncertainty about the stability of foreign markets
and the potential negative impact on domestic prosperity.
Several restructuring packages by the International Monetary
Fund stopped the economic hemorrhaging in Asia and Russia which
quelled investors' fears. Skepticism turned to slight optimism
when corporate earnings for the first quarter showed surprising
strength. Late in the second quarter and into the third, GDP
growth came roaring back while inflation remained remarkably
tame. This combination was the catalyst for investors to push
stock values higher, especially Internet related companies and
those heavily involved in technology. By the beginning of the
fourth quarter the NASDAQ 100 had already returned 31 percent
for the year. During the fourth quarter that Index returned
54 percent, producing an unbelievable 101 percent return for
the year.

<PAGE>

In contrast to the prior four years, during which large
cap growth soundly outperformed mid cap growth, this past year
saw mid cap growth stocks drastically outperform their larger
counterparts. The characteristics of small to mid sized companies
along with relatively high valuations on large cap stocks and
enthusiasm for the technology sector accounted for the shift
in returns. Small to mid cap stocks have market capitalization's
under $10 billion. They typically represent emerging companies with
new services or technologies which, if broadly adopted, could
produce significant earnings growth and market share. In 1980
for example a small, relatively unknown company entered the market
with a new computer operating system designed to make setup and
operation of IBM computers easier and more user friendly. In the
twenty years since, Microsoft has grown from a small cap stock
into a technology behemoth with the highest market capitalization
of any domestic company. Today, Microsoft sells hundreds of
products and generates annual sales of about $25 billion. Although
its market strength and stock performance will be difficult to
duplicate, investors are scrambling to find companies with similar
potential amid the recent technological boom gripping the market.

Economic data points to a strong new year with continued
low unemployment and solid corporate earnings. Investors and the
Fed worry that inflation will creep into the economy if GDP growth
continues on its torrid pace. Bond investors have already pushed
yields significantly higher over the past year. Rising interest
rates will eventually begin to weigh on stock values.

THE EQUITY GROWTH FUND

[EDGAR REFERENCE - LIPPER MID CAP, EQUITY GROWTH, S & P 400
MID CAP AND CPI INDEX LINE CHART FOR 1994-1999]

AVERAGE ANNUAL RETURNS FOR PERIODS ENDED DECEMBER 31, 1999

<TABLE>
<CAPTION>
Past 1 Past 5 Life of
Year Years Fund
------ ------ -------
<S> <C> <C> <C>
Equity Growth Fund 50.14% 27.18% 21.35% *
S&P 400 Mid Cap Index 14.70% 23.01% 18.12%
Lipper Mid Cap Growth Index 73.72% 28.07% 22.90%
Consumer Price Index (CPI) 2.63% 2.43% 2.46%

</TABLE>

Past performance should not be used to attempt to predict
future performance.

*The investment objectives and policies of the Equity Growth Fund
were changed at the end of 1993 and T. Rowe Price Associates was
added as sub-investment advisor to the Fund at that time. The
five year and life of fund figures reflect results since that change.

<PAGE>

THE BOND FUND IN 1999

THE ADVANCE CAPITAL I BOND FUND SEEKS TO PROVIDE INVESTORS WITH
CURRENT INCOME BY INVESTING AT LEAST 65 PERCENT IN CORPORATE OR U.S.
GOVERNMENT BONDS AND AS MUCH AS 45 PERCENT IN LOWER-RATED HIGH-
YIELDING INSTRUMENTS.

AS OF 12/31/99
<S> <C>
Average Maturity 13.4 Years
Average Quality BBB+
Average Duration 7.4 Years
Size $34 Million

</TABLE>

The shareholders in the Bond Fund approved a change in
investment objectives on March 9, 1999. The effect of the change
was to lengthen the average maturity of the investment grade
portion of the Fund and to include high yield and GNMA bonds in
the Fund. For the year, the Bond Fund declined 3.7 percent, compared
to the Lipper Intermediate Bond Index which declined .98 percent.
The Bond Fund's return represents 6.1 percent from income distributed
to shareholders and a 9.8 percent decrease in share price. The
accompanying graph shows the cumulative performance of the Bond
Fund, the Balanced Fund, the Lipper Intermediate Bond Index, the
Consumer Price Index (CPI) and the Lipper Balanced Index since
August 1987, the Fund's inception.

In the first half of 1999, the U.S. economy appeared
destined to succumb, in some way, to the foreign contagion
which had rocked many Asian economies over the prior two years.
Diligent fiscal restructuring along with continued help by the
International Monetary Fund, however, helped to stabilize many
of those economies. This quelled domestic fears of a near term
recession or slowdown hitting the U.S. economy. The all clear
was sounded by mid summer as consumer confidence snapped back to
its prior high and GDP growth, which had fallen in the second
quarter, jumped to an annualized rate of 5.7 percent for the third
quarter. In addition, the unemployment rate hit a 30 year low
and oil prices more than doubled from $10 a barrel early in the
year to about $25 a barrel by December. The remarkable resilience
of the U.S. economy to rebound from severe foreign pressures did
not go unnoticed. The Federal Reserve raised interest rates three
times from June through November in order to suppress renewed
inflationar pressures and slow the torrid pace of GDP growth.

A strong U.S. economy combined with rising interest rates
left fixed income investors stunned and returns negative for 1999.
The 30 year U.S. Treasury bond declined about 14.3 percent (including
interest) for the year while the ten year treasury bond was off
about 7.8 percent (including interest). Most investment grade
corporate bonds posted negative returns, the severity depended on
specific maturity and underlying credit quality. High yield bonds
faired a bit better, returning on average about 1.5 percent for the
year.

At December 31, the Bond Fund was fully invested with an overall
portfolio maturity of about 13 years. The Fund's maturity is near the
middle of the new target range of 10 to 20 years and longer than the
year earlier figure of 8.2 years. The changes to investment objective
accounted for the rise in average portfolio maturity over last year.
The average quality of the Fund declined to BBB+ from A a year earlier.
Again the difference represents implementing the change in investment
objectives to incorporate high yield bonds into the Fund which, by
definition, have a lower rating than investment grade bonds.

<PAGE>

Today, underlying economic strength combined with an enthusiastic
consumer and record high equity values has the Federal Reserve poised
to raise interest rates further to cool economic growth to a more
sustainable level. In the short term, higher rates would not bode
well for fixed income investments. In the long run, however, higher
rates would keep economic growth and consumer spending in check and
fixed income investments more attractive. The Bond Fund's
characteristics of long investment grade corporate bonds along with
high yield bonds should keep the Fund well positioned relative to its
peers should this scenario fold.

THE BALANCED FUND IN 1999

THE ADVANCE CAPITAL I BALANCED FUND SEEKS TO PROVIDE CAPITAL APPRECIATION,
CURRENT INCOME AND PRESERVATION OF CAPITAL BY INVESTING IN A DIVERSIFIED
PORTFOLIO OF COMMON STOCKS AND BONDS.

<TABLE>
<CAPTION>
AS OF 12/31/99
<S> <C>
Bonds 40%
Small Stocks 23%
Large Stocks 37%
Size $167 Million

</TABLE>

The Balanced Fund increased 8.4 percent in 1999 while the
Lipper Balanced Index increased 9.0 percent. The accompanying graph
illustrates the cumulative performance of the Balanced Fund, the
Bond Fund, the Lipper Intermediate Bond Index, the Lipper Balanced
Index and the Consumer Price Index (CPI) since August 1987, the
Fund's inception. Although the Fund began in August of 1987, the
investment objectives and policies were changed at the end of 1993
and T. Rowe Price Associates was added as sub-investment advisor
to the Fund at that time.

The Balanced Fund's investment mix of 40 percent investment
grade bonds, 40 percent large cap value and 20 percent mid cap growth
kept the fund well diversified while producing investment returns
in-line with the average balanced fund. The global slowdown which
plagued many foreign countries late in 1998, appeared destined to
hit the U.S. economy in 1999. The Federal Reserve lowered rates three
times late in 1998 to defray this threat and quell the growing fear
of a market correction. Lower rates along with strong underlying
economic fundamentals brought investors back into the market and
lifted GDP growth by the second half of 1999. As optimism returned,
investors pulled money out of fixed income investments in favor of
the high growth technology sector. By mid year, U.S. economic growth
had rebounded significantly and the risk of a recession had vanished.
In fact, inflation fears crept back into the economy which sent the
Federal Reserve on course to reverse the prior three rate reductions
by the end of 1999. A stark reversal in interest rates did not bode
well for fixed income securities. The yield on the thirty year U.S.
Treasury bond rose from about 5 percent at the beginning of the year
to around 6.5 percent at year end, which conversely, led to a
significant price decline in most fixed income securities.

While technology was on a tear, large cap value stocks, on
average, returned less than 10 percent while large cap growth stocks
returned around 20 percent. The distinct gap between these sectors
illustrates the exuberance surrounding technology relative to the
staid industrial sector. Traditional value

<PAGE>

investing utilizes fundamental analysis to determine a company's worth
based on book value of assets, sales growth and relative P/E ratio.
Finding a value stock equates to buying when a company's worth is not
fully priced into the current market value of the stock. Conversely,
growth investing, especially with today's Internet stocks, relies less
on traditional fundamental analysis and more on future earning
expectations, growth of proprietary technology and projected market
position. Although both strategies are important to a well balanced
portfolio, traditional value investing has outperformed growth investing
over long investment periods.

Today, the high flying technology sector has come under some
pressure from profit taking and rising interest rates. The underlying
economic fundamentals, however, remain positive and the possibility of
a severe market correction or domestic recession appears remote. The
Balanced Fund's allocation between large company value, small company
growth and fixed income securities, along with proper industry
diversification, should continue to provide a consistency and balanced
returns within the dynamic investment environment.

THE BOND AND BALANCED FUND

[EDGAR REFERENCE - LIPPER BALANCED, BALANCED, LIPPER BOND, BOND AND
CPI INDEX LINE CHART FOR 1987-1999]

AVERAGE ANNUAL RETURNS FOR PERIODS ENDED DECEMBER 31, 1999

Past 1 Past 5 Past 10
Year Years Years
------ ------ -------
<S> <C> <C> <C>
Balanced Fund * 8.37% 17.35% 10.61%
Bond Fund ** -3.70% 7.08% 7.10%
Lipper Intermediate Bond Index -.98% 6.73% 7.06%
Lipper Balanced Index 8.98% 15.43% 12.32%
Consumer Price Index (CPI) 2.63% 2.43% 2.99%

</TABLE>

Past performance should not be used to attempt to predict future performance.

*The investment objectives and policies of the Balanced Fund were
changed at the end of 1993 and T. Rowe Price Associates was added as
sub-investment advisor to the Fund at that time. The five year figures
reflect results since that change.

** The investment objectives of the Bond Fund changed on March 9, 1999
by a majority vote of outstanding shares. Returns for Past 5 Years and Life of
Fund incorporate prior investment objectives.

<PAGE>

THE RETIREMENT INCOME FUND IN 1999

THE ADVANCE CAPITAL I RETIREMENT INCOME FUND SEEKS TO PROVIDE
INVESTORS WITH CURRENT INCOME BY INVESTING AT LEAST 65 PERCENT IN
INVESTMENT GRADE CORPORATE AND U.S. GOVERNMENT BONDS AND AS MUCH AS
33 PERCENT IN LOWER-RATED HIGH-YIELDING INSTRUMENTS.

AS OF 2/31/99
<S> <C>
Average Maturity 14.6 Years
Average Quality BBB
Average Duration 7.5 Years
Size $205 Million

</TABLE>

The Retirement Income Fund declined 2.3 percent for the year
while the Lipper BBB Index declined 1.1 percent. The Retirement Income
Fund's return was comprised of 6.7 percent from income distributed to
shareholders and a 9.0 percent decrease in share price. The accompanying
graph shows the cumulative performance of the Retirement Income Fund,
the Lipper BBB Index and the Consumer Price Index (CPI) since January
1993, the Fund's inception.

The past year proved particularly difficult for most fixed income
investments. The Federal Reserve raised rates three times over the past
eight months, partially to reverse three rate cuts enacted during the
1998 Asian financial crisis and also to slow economic growth. The Fed's
action pushed the yield on the 30 year U.S. Treasury bond from about 5
percent at the beginning of the year to around 6.5 percent by year's end.
Also, many fixed income investors were tempted by the red-hot equity
market which sapped demand for fixed income securities as money flowed
from bonds into stocks. The Retirement Income Fund holds about 67 percent
of total assets in investment grade corporate bonds with long average
maturities. This made it particularly susceptible to rising rates during
the year. Although the traditional measures of inflation are tame,
underlying concerns about wage pressures, rising oil prices and general
prosperity has left fixed income investors worried about future inflation.
Overall, high yield returns were slightly positive even though certain
sectors performed poorly and the market was quite volatile. The health
care industry, for example, was adversely affected by the government's
decision to mandate a Prospective Payment System for long term care
facilities. This complicated payment scheme forced some companies to
reconfigure their cost and revenue structures. Pressure to change did
not sit well with high yield investors and, as expected, several bonds
in this sector declined in price. Another sector hit hard was consumer
textile and apparel. The significant trade imbalance with Asia kept
import prices cheap and domestic apparel companies under severe pricing
pressure. For example, Fruit of the Loom, a well known domestic apparel
company, filed for Chapter 11 bankruptcy protection in December as a
result of high debt and poor market conditions.

Since the Asian crisis in the fall of 1998, high yield investors
have favored large, liquid issues with sound fundamentals and higher
quality ratings within the high yield universe. The smaller issues or
lower rated bonds have come under pressure as investors shift to more
stable names. Also, 1999 showed a sizable increase in distressed rates
among high yield issuers. The Retirement Income Fund, although not immune
to these pressures, is well diversified with more than 77 high yield names
in ten different industries. Also, since inception, our strategy has
favored large, liquid issues with solid fundamentals, good growth

<PAGE>

prospects and upper tier credit ratings within the high yield universe.
This basic philosophy has kept problem names to a minimum while generating a
competitive income yield.

Today, the Retirement Income Fund holds approximately 67 percent
of assets in long maturing investment grade and about 33 percent in high
yield securities. The average maturity is about 14.6 years and overall
portfolio quality is BBB. We continue to favor large high yield issuers
with sound fundamentals and investment grade bonds with shorter maturities
in the 10 to 15 year range. The Fund remains focused on providing stable,
reliable income at a reasonable level of risk.

THE RETIREMENT INCOME FUND

[EDGAR REFERENCE - RETIREMENT INCOME, LIPPER BBB INDEX AND CPI INDEX
LINE CHART FOR 1993-1999]

AVERAGE ANNUAL RETURNS FOR PERIODS ENDED DECEMBER 31, 1999

Past 1 Past 5 Life of
Year Years Fund
------ ------ -------
<S> <C> <C> <C>
Retirement Income Fund -2.33% 8.39% 7.07%
Lipper BBB Index -1.12% 7.68% 6.55%
Consumer Price Index (CPI) 2.63% 2.43% 2.50%

</TABLE>

Past performance should not be used to attempt to predict future performance.

<PAGE>

THE CORNERSTONE STOCK FUND IN 1999

THE ADVANCE CAPITAL I CORNERSTONE STOCK FUND SEEKS TO PROVIDE LONG-TERM
GROWTH OF CAPITAL BY INVESTING PRIMARILY IN COMMON STOCKS OF LARGE, WELL
ESTABLISHED COMPANIES.

TOP FIVE HOLDINGS
-----------------
Microsoft
Intel
General Electric
Cisco Systems
Wal-Mart Stores

The Cornerstone Stock Fund returned 29.6 percent for the year compared
to the S&P 500 Index which returned 21.0 percent. The accompanying graph
shows the cumulative performance of the Cornerstone Stock Fund, the S&P
500 Index and the Consumer Price Index (CPI) since December 1998, the Fund's
inception.

Throughout 1999, the equity markets benefited from continued low
inflation, robust corporate earnings and massive inflows into stock mutual
funds. The general theme favored technology and Internet related companies
with the opportunity to capitalize on the growing demand for telecommunication
equipment and parts, increased bandwidth and computer software.

The Cornerstone Stock Fund invests primarily in a diversified group of
large, well established companies, each with market capitalization well over
$10 billion. Companies of this size tend to have established product lines,
solid market positions and substantial financial resources. These are the
most liquid stocks in the marketplace.

Today, the Cornerstone Stock Fund is fully invested with over sixty
eight securities in ten different industries. An emphasis on technology,
pharmaceuticals and telecommunications recognizes the major growth
opportunities of the next decade. The Fund's strategy is to apply diligent
investment research in selecting highly capitalized companies with industry
leading positions.

<PAGE>

THE CORNERSTONE STOCK FUND

[EDGAR REFERENCE - CORNERSTONE STOCK, S&P 500 INDEX AND CPI INDEX
LINE CHART FOR 1999]

AVERAGE ANNUAL RETURNS FOR PERIODS ENDED DECEMBER 31, 1999

Past 1 Past 5 Life of
Year Years Fund
------ ------ -------
<S> <C> <C> <C>
Cornerstone Stock 29.62% N/A 34.06%
S&P 500 Index 21.04% N/A 25.07%
Consumer Price Index (CPI) 2.63% N/A 2.73%

</TABLE>

Past performance should not be used to attempt to predict future performance.

<PAGE>

ADVANCE CAPITAL I, INC.
FINANCIAL HIGHLIGHTS
- ------------------------------------------------------
<TABLE>
<CAPTION>

EQUITY GROWTH
--------------------------------------------------
Years ended December 31
--------------------------------------------------
1999 1998 1997 1996 1995
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA
Net asset value, beginning of year . . . . . $20.05 $17.25 $14.72 $12.53 $9.08
------- ------- ------- ------- -------
Income from investment operations
Net investment income (loss) . . . . . . . . (0.14) (0.10) (0.09) (0.07) (0.03)

Net realized and unrealized gain (loss)
on investments . . . . . . . . . . . . . . 10.01 2.90 2.69 2.26 3.48
------- ------- ------- ------- -------
Total from investment operations . . . . . . 9.87 2.80 2.60 2.19 3.45
------- ------- ------- ------- -------
Less distributions
Net investment income . . . . . . . . . . . 0.00 0.00 0.00 0.00 0.00

Net realized gain on investments . . . . . . (3.49) 0.00 (0.07) 0.00 0.00
------- ------- ------- ------- -------
Total distributions . . . . . . . . . . . . (3.49) 0.00 (0.07) 0.00 0.00
------- ------- ------- ------- -------
Net asset value, end of year . . . . . . . . . $26.43 $20.05 $17.25 $14.72 $12.53
======= ======= ======= ======= =======

TOTAL RETURN . . . . . . . . . . . . . . . . . 50.14% 16.23% 17.68% 17.48% 38.00%

Ratios and Supplemental Data
Net assets, end of year (in thousands) . . . $114,515 $68,061 $54,332 $38,767 $25,625
Ratio of expenses to average net assets . . 1.02% 1.02% 1.07% 1.09% 1.12%
Ratio of net investment income (loss)
to average net assets . . . . . . . . . . -0.63% -0.58% -0.58% -0.50% -0.29%
Portfolio turnover rate . . . . . . . . . . 36.49% 22.34% 20.53% 24.75% 13.86%

</TABLE>

See Notes To Financial Statements

<PAGE>

ADVANCE CAPITAL I, INC.
FINANCIAL HIGHLIGHTS - Continued
- ------------------------------------------------------
<TABLE>
<CAPTION>

BOND
--------------------------------------------------
Years ended December 31
--------------------------------------------------
1999 1998 1997 1996 1995
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA
Net asset value, beginning of year . . . . $10.62 $10.52 $10.37 $10.79 $9.61
------- ------- ------- ------- -------
Income from investment operations
Net investment income . . . . . . . . . . . 0.75 0.67 0.69 0.70 0.70

Net realized and unrealized gain (loss)
on investments . . . . . . . . . . . . . (1.04) 0.15 0.24 (0.42) 1.18
------- ------- ------- ------- -------
Total from investment operations . . . . . (0.29) 0.82 0.93 0.28 1.88
------- ------- ------- ------- -------
Less distributions
Net investment income . . . . . . . . . . . (0.75) (0.67) (0.69) (0.70) (0.70)

Net realized gain on investments . . . . . 0.00 (0.05) (0.09) 0.00 0.00
------- ------- ------- ------- -------
Total distributions . . . . . . . . . . . . (0.75) (0.72) (0.78) (0.70) (0.70)
------- ------- ------- ------- -------
Net asset value, end of year . . . . . . . . $9.58 $10.62 $10.52 $10.37 $10.79
======= ======= ======= ======= =======

TOTAL RETURN . . . . . . . . . . . . . . . . -3.71% 8.12% 9.41% 2.81% 20.15%

Ratios and Supplemental Data
Net assets, end of year (in thousands). . . $34,362 $3,746 $4,203 $4,430 $4,527
Ratio of expenses to average net assets . . 0.73% 0.52% 0.54% 0.55% 0.55%
Ratio of net investment income to average
net assets . . . . . . . . . . . . . . . 6.64% 6.35% 6.65% 6.71% 6.80%
Portfolio turnover rate . . . . . . . . . . 32.43% 11.56% 21.95% 19.77% 6.69%

</TABLE>

See Notes To Financial Statements

<PAGE>

ADVANCE CAPITAL I, INC.
FINANCIAL HIGHLIGHTS - Continued
- ------------------------------------------------------
<TABLE>
<CAPTION>

BALANCED
-------------------------------------------------
Years ended December 31
--------------------------------------------------
1999 1998 1997 1996 1995
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA
Net asset value, beginning of year . . . . $17.13 $15.69 $13.68 $12.57 $9.97
------- ------- ------- ------- -------
Income from investment operations
Net investment income . . . . . . . . . . 0.51 0.48 0.45 0.41 0.35

Net realized and unrealized gain (loss)
on investments . . . . . . . . . . . . . 0.87 1.56 2.32 1.37 2.75
------- ------- ------- ------- -------
Total from investment operations . . . . . 1.38 2.04 2.77 1.78 3.10
------- ------- ------- ------- -------
Less distributions
Net investment income . . . . . . . . . . (0.51) (0.48) (0.45) (0.41) (0.35)

Net realized gain on investments . . . . . (0.98) (0.12) (0.31) (0.26) (0.15)
------- ------- ------- ------- -------
Total distributions . . . . . . . . . . . (1.49) (0.60) (0.76) (0.67) (0.50)
------- ------- ------- ------- -------
Net asset value, end of year . . . . . . . . $17.02 $17.13 $15.69 $13.68 $12.57
======= ======= ======= ======= =======

TOTAL RETURN . . . . . . . . . . . . . . . . 8.37% 13.15% 20.50% 14.48% 31.53%

Ratios and Supplemental Data
Net assets, end of year (in thousands) . . $169,216 $125,883 $99,421 $75,202 $59,299
Ratio of expenses to average net assets . 1.03% 1.01% 1.04% 1.06% 1.07%
Ratio of net investment income to average
net assets . . . . . . . . . . . . . . . 2.97% 2.92% 3.02% 3.17% 3.11%
Portfolio turnover rate . . . . . . . . . 23.76% 11.04% 10.13% 12.79% 22.72%

</TABLE>

See Notes To Financial Statements

<PAGE>

ADVANCE CAPITAL I, INC.
FINANCIAL HIGHLIGHTS - Continued
- ------------------------------------------------------
<TABLE>
<CAPTION>

RETIREMENT INCOME
--------------------------------------------------
Years ended December 31
--------------------------------------------------
1999 1998 1997 1996 1995
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA
Net asset value, beginning of year . . . . $10.56 $10.65 $10.20 $10.51 $9.22
------- ------- ------- ------- -------
Income from investment operations
Net investment income . . . . . . . . . . 0.71 0.73 0.74 0.75 0.76

Net realized and unrealized gain (loss)
on investments . . . . . . . . . . . . . (0.95) (0.08) 0.45 (0.31) 1.29
------- ------- ------- ------- -------
Total from investment operations . . . . . (0.24) 0.65 1.19 0.44 2.05
------- ------- ------- ------- -------
Less distributions
Net investment income . . . . . . . . . . (0.71) (0.73) (0.74) (0.75) (0.76)

Net realized gain on investments . . . . . 0.00 (0.01) 0.00 0.00 0.00
------- ------- ------- ------- -------
Total distributions . . . . . . . . . . . (0.71) (0.74) (0.74) (0.75) (0.76)
------- ------- ------- ------- -------
Net asset value, end of year . . . . . . . . $9.61 $10.56 $10.65 $10.20 $10.51
======= ======= ======= ======= =======

Total Return . . . . . . . . . . . . . . . . -2.33% 6.20% 12.20% 4.54% 22.96%

Ratios and Supplemental Data
Net assets, end of year (in thousands) . . $209,791 $221,221 $200,511 $170,799 $139,299
Ratio of expenses to average net assets . 0.81% 0.79% 0.82% 0.82% 0.84%
Ratio of net investment income to average
net assets . . . . . . . . . . . . . . . 7.06% 6.87% 7.21% 7.45% 7.64%
Portfolio turnover rate . . . . . . . . . 17.89% 19.52% 16.60% 8.34% 15.63%

</TABLE>

See Notes To Financial Statements

<PAGE>

ADVANCE CAPITAL I, INC.
FINANCIAL HIGHLIGHTS - Continued
- ------------------------------------------------------
<TABLE>
<CAPTION>
CORNERSTONE
STOCK
------------------------
Partial
Year
Ended *
1999 Dec. 31, 1998
------- --------------
<S> <C> <C>
SELECTED PER-SHARE DATA
Net asset value, beginning of period . . . . . . . . . . . . . . . . . . $10.46 $10.00
-------- --------
Income from investment operations
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . 0.01 0.00

Net realized and unrealized gain (loss)
on investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.09 0.46
-------- --------
Total from investment operations . . . . . . . . . . . . . . . . . . . 3.10 0.46
-------- --------
Less distributions
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . (0.01) 0.00

Net realized gain on investments . . . . . . . . . . . . . . . . . . . 0.00 0.00
-------- --------
Total distributions . . . . . . . . . . . . . . . . . . . . . . . . . . (0.01) 0.00
-------- --------
Net asset value, end of period . . . . . . . . . . . . . . . . . . . . . $13.55 $10.46
======== ========

TOTAL RETURN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29.62% 4.60%

Ratios and Supplemental Data
Net assets, end of period (in thousands) . . . . . . . . . . . . . . . . $52,356 $7,316
Ratio of expenses to average net assets . . . . . . . . . . . . . . . . 0.77% 0.66% **
Ratio of net investment income to average
net assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.11% 1.20% **
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . . . 7.62% 0.00%

</TABLE>

* From December 17, 1998 (commencement of operations) to December 31, 1998.
** Annualized

See Notes To Financial Statements

<PAGE>

ADVANCE CAPITAL I, INC. - EQUITY GROWTH FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
- -----------------------------------------------------
<TABLE>
<CAPTION>
MARKET
COMMON STOCK SHARES VALUE
- ----------------------------------------- ------------ ------------
<S> <C> <C>
ADVERTISING - 2.7%
Catalina Marketing Corporation* 5,600 $ 648,200
Harte-Hanks Inc. 8,000 174,000
Interpublic Group of Companies, Inc. 8,400 484,575
Lamar Advertising Company* 7,500 454,219
Omnicom Group, Inc. 5,000 500,000
Young & Rubicam, Inc. 11,000 778,250

AIR TRANSPORT - 0.2%
Air Express International Corp. 7,650 247,191

APPAREL - 0.4%
Cintas Corporation 6,100 324,063
Quiksilver, Inc.* 10,500 162,750

BANK - 2.3%
City National Corporation 9,000 296,438
Community First Bankshares, Inc. 15,000 236,250
North Fork Bancorporation 13,000 225,874
Northern Trust Corporation 11,200 593,600
State Street Corporation 6,100 445,681
U.S. Trust Corporation 7,200 577,350
Zions Bancorporation 5,000 295,938

BIOTECHNOLOGY - 6.0%
Amgen, Inc.* 10,000 600,625
Biogen, Inc.* 5,300 447,850
Human Genome Sciences, Inc.* 5,700 869,963
Idec Pharmaceuticals Corporation* 6,000 589,500
Immunex Corporation* 5,400 591,300
Incyte Pharmaceuticals, Inc.* 9,000 539,999
Millennium Pharmaceuticals, Inc.* 10,000 1,220,000
PE Corp-Celera Genomics Group* 10,750 1,601,750
Protein Design Labs, Inc.* 6,000 420,000

BROADCASTING / CABLE TV - 6.0%
AMFM, Inc.* 7,000 547,750
Clear Channel Communications* 5,499 490,786
Cox Communications, Inc.* 11,158 574,637
Cumulus Media, Inc.* 8,500 431,375
Emmis Communications Corporation* 7,500 934,805
Entercom Communications Corporation* 8,000 530,000
Hispanic Broadcasting Corporation* 4,600 424,206
Infinity Broadcasting Corporation* 22,781 824,387
Univision Communications, Inc.* 9,600 981,000
USA Networks, Inc.* 8,500 469,625
Westwood One, Inc.* 6,000 456,000
Young Broadcasting, Inc.* 5,000 255,000

BUILDING MATERIALS - 0.3%
Dycom Industries, Inc.* 8,000 352,500

CHEMICAL - 1.5%
Ecolab, Inc. 12,500 489,063
Lilly Industries, Inc. 13,500 181,405
MacDermid, Inc. 9,000 369,563
Sigma-Aldrich Corporation 8,000 240,500
Valspar Corporation 10,800 452,250

COMPUTER & PERIPHERALS - 5.9%
Cisco Systems, Inc.* 3,500 374,938
Comverse Technology, Inc.* 6,750 977,063
Diebold, Inc. 9,500 223,250
EMC Corporation* 4,500 491,625
Gateway, Inc.* 6,500 468,406
Microchip Technology, Inc.* 5,425 371,273
National Computer Systems, Inc. 8,500 319,812
Network Appliance, Inc.* 14,000 1,162,875
Synopsys, Inc.* 6,400 427,200
VERITAS Software Corporation* 9,500 1,359,688
Visual Networks, Inc.* 7,000 554,750

</TABLE>

See Notes To Financial Statements

<PAGE>

ADVANCE CAPITAL I, INC. - EQUITY GROWTH FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
- -----------------------------------------------------
<TABLE>
<CAPTION>

MARKET
COMMON STOCK SHARES VALUE
- ----------------------------------------- ------------ ------------
<S> <C> <C>
COMPUTER SOFTWARE & SERVICES - 17.0%
Adobe Systems, Inc. 8,000 $ 538,000
Affiliated Computer Services, Inc.* 7,000 321,999
BARRA, Inc.* 7,000 222,250
BEA Systems, Inc.* 6,000 419,625
BISYS Group, Inc.* 6,000 391,500
BMC Software, Inc.* 11,200 895,300
Cadence Design Systems, Inc.* 11,000 264,000
Check Point Software Technologies Ltd.* 5,000 993,750
Citrix Systems, Inc.* 10,500 1,291,500
CMGI, Inc.* 4,000 1,107,500
CNET, Inc.* 7,000 397,250
Compuware Corporation* 20,000 745,000
Concord Communications, Inc.* 5,000 221,875
DST Systems, Inc.* 5,600 427,349
Electronic Arts, Inc.* 6,500 546,000
FactSet Research Systems Inc. 6,200 493,675
Great Plains Software, Inc.* 5,500 411,125
IMS Health Incorporated 12,000 326,250
Intuit, Inc.* 12,600 755,213
Iss Group, Inc.* 7,000 497,874
Keane, Inc.* 5,500 176,687
Legato Systems, Inc.* 9,400 646,838
Lycos, Inc.* 7,000 556,938
Mercury Interactive Corporation* 7,000 755,563
National Data Corporation 6,000 203,625
National Instruments Corporation* 9,500 363,375
Network Associates, Inc.* 8,974 239,494
Oracle Corporation* 5,500 616,344
Progress Software Corporation* 10,000 567,500
Psinet, Inc.* 8,000 494,000
SEI Investments Company 5,500 654,586
Shared Medical Systems Corporation 3,500 178,281
SunGard Data Systems, Inc.* 9,500 225,625
Symantec Corporation* 8,800 515,899
Transaction Systems Architects, Inc.* 10,000 279,999
Visio Corporation* 5,600 266,000
WebTrends Corporation* 5,200 421,200
Whittman-Hart, Inc.* 7,900 423,638
Wind River Systems, Inc.* 16,000 587,999

DIVERSIFIED - 0.9%
Danaher Corporation 5,000 241,250
Roper Industries, Inc. 10,500 397,031
Viad Corp. 13,100 365,163

DRUG - 2.9%
BioChem Pharma, Inc.* 12,500 271,875
Biomatrix, Inc.* 9,000 173,250
Cardinal Health, Inc. 6,187 296,203
Elan Corporation PLC-ADR* 9,400 277,300
Express Scripts, Inc.* 4,000 256,000
Gilead Sciences, Inc.* 4,000 216,500
MedImmune, Inc.* 5,000 829,375
QLT Phototherapeutics, Inc.* 8,000 470,000
Shire Pharmaceuticals Group PLC-ADR* 9,800 285,425
Watson Pharmaceuticals, Inc.* 5,600 200,550

DRUGSTORE - 0.4%
CVS Corporation 6,000 239,250
Duane Reade, Inc.* 9,500 261,844

ELECTRIC & GAS UTILITIES - 0.5%
AES Corporation* 7,500 560,625

ELECTRICAL EQUIPMENT - 0.8%
Littlefuse, Inc.* 13,000 315,453
Molex, Inc. 7,421 335,800
Rayovac Corporation* 12,900 243,488

</TABLE>

See Notes To Financial Statements

<PAGE>

ADVANCE CAPITAL I, INC. - EQUITY GROWTH FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
- -----------------------------------------------------
<TABLE>
<CAPTION>

MARKET
COMMON STOCK SHARES VALUE
- ----------------------------------------- ------------ ------------
<S> <C> <C>
ELECTRONICS - 4.6%
Flextronics International Ltd.* 8,000 $ 368,000
Jabil Circuit, Inc.* 5,500 401,500
Macromedia* 8,000 584,999
Micrel, Inc.* 7,000 398,563
Sanmina Corporation* 5,400 539,325
Sawtek, Inc.* 7,000 465,938
SCI Systems, Inc.* 6,000 493,125
Symbol Technologies, Inc. 14,962 951,022
Teradyne, Inc.* 9,200 607,200
Waters Corporation* 9,600 508,800

ENTERTAINMENT - 0.3%
Premier Parks, Inc.* 11,000 317,625

ENVIRONMENTAL - 0.2%
Republic Services, Inc.* 13,000 185,249

FINANCIAL SERVICES - 2.6%
Capital One Financial Corporation 5,100 245,756
Concord EFS, Inc.* 10,500 270,375
Eaton Vance Corporation 11,200 425,600
Federated Investors 18,000 361,125
Finova Group, Inc. 6,000 213,000
Franklin Resources, Inc. 11,300 362,306
Paychex, Inc. 10,125 405,000
Providian Financial Corporation 4,000 364,250
Waddell & Reed Financial, Inc. 13,500 366,188

FOOD PROCESSING - 0.3%
Tootsie Roll Industries, Inc. 10,776 354,935

FOOD WHOLESALERS - 0.3%
U.S. Foodservice* 20,500 343,375

FURNITURE / HOME FURNISHINGS - 0.5%
HON INDUSTRIES Inc. 12,000 263,250
Leggett & Platt, Inc. 12,300 263,681

HOMEBUILDING - 0.2%
Lennar Corporation 12,600 204,750

INDUSTRIAL SERVICES - 2.1%
ACNielsen Corporation* 15,500 381,688
Apollo Group, Inc.* 12,250 245,766
DeVry, Inc.* 16,000 300,000
Equifax, Inc. 11,700 275,681
Iron Mountain, Inc.* 10,000 393,125
ITT Educational Services, Inc.* 7,500 115,781
Manpower, Inc. 9,000 338,624
Quintiles Transnational Corporation* 9,000 168,188
Robert Half International, Inc.* 7,750 221,358

INSURANCE - 2.1%
Ace Ltd. 8,900 148,519
Ambac Financial Group, Inc. 7,200 375,750
E. W. Blanch Holdings, Inc. 5,000 306,250
Medical Assurance, Inc.* 13,500 286,031
Mutual Risk Management Ltd. 21,132 355,282
Protective Life Corporation 12,100 384,931
Radian Group, Inc. 6,500 310,375
XL Capital Ltd. 5,500 285,313

MACHINERY - 1.1%
Cognex Corporation* 9,500 370,500
Donaldson Company, Inc. 13,600 327,250
IDEX Corporation 9,500 288,563
Parker-Hannifin Corporation 6,000 307,875

MEDICAL SERVICES - 0.7%
Lincare Holdings, Inc.* 8,100 280,969
Quest Diagnostics, Inc.* 10,500 320,906
Renal Care Group, Inc.* 10,500 245,438

MEDICAL SUPPLIES - 3.3%
Allergan, Inc. 6,000 298,500
ArthroCare Corporation* 6,000 366,000

</TABLE>

See Notes To Financial Statements

<PAGE>

ADVANCE CAPITAL I, INC. - EQUITY GROWTH FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
- -----------------------------------------------------
<TABLE>
<CAPTION>

MARKET
COMMON STOCK SHARES VALUE
- ----------------------------------------- ------------ ------------
<S> <C> <C>
MEDICAL SUPPLIES - 3.3% (Continued)
Biomet, Inc. 9,500 $ 380,000
Boston Scientific Corporation* 6,000 131,250
Guidant Corporation 7,000 329,000
Medical Manager Corporation* 4,500 379,125
Medtronic, Inc. 13,000 473,688
ResMed, Inc.* 10,500 438,375
Stryker Corporation 5,000 348,125
Sybron International Corp.* 13,000 320,938
VISX, Inc.* 4,500 232,875
Wesley Jessen Visioncare* 1,500 56,813

METAL FABRICATING - 0.2%
Lincoln Electric Holdings, Inc. 12,700 261,938

NEWSPAPER - 0.2%
Central Newspapers, Inc. 6,000 236,250

OFFICE EQUIPMENT & SUPPLIES - 0.4%
Avery Dennison Corporation 6,700 488,263

OILFIELD SERVICES - 1.8%
BJ Services Company* 11,500 480,844
Cooper Cameron Corporation* 10,400 508,950
Smith International, Inc.* 11,800 586,313
Veritas DGC, Inc.* 13,300 186,200
Weatherford International, Inc.* 8,335 332,879

PACKAGING & CONTAINER - 0.3%
Sealed Air Corporation* 5,900 305,694

PETROLEUM - 0.4%
Apache Corporation 8,000 295,500
Devon Energy Corporation 4,500 147,938

PRECISION INSTRUMENT - 1.2%
Dionex Corporation* 6,000 247,125
KLA-Tencor Corporation* 4,800 534,600
PE Corp-PE Biosystems Group 5,000 601,563

PRINTING - 0.4%
Valassis Communications, Inc.* 12,000 507,000

PUBLISHING - 0.4%
Meredith Corporation 10,000 416,875

RAILROAD - 0.4%
Kansas City Southern Ind., Inc. 6,000 447,749

REAL ESTATE INVESTMENT MANAGEMENT - 0.5%
Jones Lang LaSalle, Inc.* 10,800 128,250
Security Capital Group, Inc. - Class B* 16,800 210,000
Trammell Crow Company* 19,000 220,875

RECREATION - 0.8%
Carnival Corporation 9,000 430,313
Harley-Davidson, Inc. 8,000 512,500

RESTAURANT - 0.3%
Starbucks Corporation* 16,200 392,850

RETAIL STORE - 5.9%
Bed Bath & Beyond, Inc.* 14,000 486,500
BJ's Wholesale Club, Inc.* 11,000 401,500
CDW Computer Centers, Inc.* 5,000 393,125
Circuit City Stores, Inc. 8,000 360,499
Dollar General Corporation 23,241 528,733
Dollar Tree Stores, Inc.* 6,000 290,625
Family Dollar Stores 11,500 187,594
Harcourt General, Inc. 7,500 301,875
Kohl's Corporation* 3,300 238,219
Lands' End, Inc.* 7,200 250,200
Linens 'n Things, Inc.* 7,000 207,375
Ross Stores, Inc. 16,500 295,969
Staples, Inc.* 10,500 217,875
The Men's Wearhouse, Inc.* 9,225 270,984
Tiffany & Company 14,000 1,249,500
TJX Companies, Inc. 12,000 245,250
Williams-Sonoma, Inc.* 10,000 460,000
Zale Corporation* 7,000 338,625

</TABLE>

See Notes To Financial Statements

<PAGE>

ADVANCE CAPITAL I, INC. - EQUITY GROWTH FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
- -----------------------------------------------------
<TABLE>
<CAPTION>

COMMON STOCK AND MARKET
REPURCHASE AGREEMENT SHARES VALUE
- ----------------------------------------- ------------ ------------
<S> <C> <C>
SECURITIES BROKERAGE - 1.1%
Charles Schwab Corporation 7,000 $ 267,750
Investment Technology Group, Inc. 12,444 357,765
Legg Mason, Inc. 11,000 398,750
Raymond James Financial, Inc. 10,125 188,578

SEMICONDUCTOR - 8.4%
Altera Corporation* 13,600 674,050
Analog Devices, Inc.* 8,500 790,500
Applied Materials, Inc.* 4,500 570,094
Applied Micro Circuits Corporation* 6,000 763,500
Broadcom Corporation* 2,000 544,750
Dallas Semiconductor Corporation 6,500 418,844
Lattice Semiconductor Corporation* 12,000 565,500
Linear Technology Corporation 9,000 644,063
Maxim Integrated Products, Inc.* 18,000 849,375
National Semiconductor Corp.* 9,500 406,719
PMC-Sierra, Inc.* 6,800 1,090,125
Qlogic Corporation* 3,000 479,625
Vitesse Semiconductor Corporation* 15,000 786,563
Xilinx, Inc.* 21,200 963,938

TELECOMMUNICATIONS EQUIPMENT - 3.4%
ADC Telecommunications, Inc.* 5,500 399,093
American Tower Corporation 14,000 427,875
E-Tek Dynamics, Inc.* 4,500 605,812
General Instrument Corporation* 6,600 561,000
JDS Uniphase Corporation* 8,000 1,290,500
Pinnacle Holdings, Inc.* 10,000 423,750
Tellabs, Inc.* 3,500 224,656

TELECOMMUNICATIONS SERVICE - 5.2%
Allegiance Telecom, Inc.* 5,000 461,250
Crown Castle International Corporation* 16,000 514,000
Intermedia Communications, Inc.* 11,500 446,344
McleodUSA Inc.* 13,000 765,375
Nextel Communications, Inc.* 5,500 567,187
NEXTLINK Communications, Inc.* 10,000 830,625
NTL Incorporated* 3,125 389,844
United States Cellular Corporation* 3,500 353,281
Viatel, Inc.* 9,000 482,625
Western Wireless Corporation* 9,500 634,125
Winstar Communications, Inc.* 6,500 489,125

THRIFT - 0.4%
Charter One Financial, Inc. 10,815 206,837
JSB Financial, Inc. 5,000 259,374

TOYS - 0.3%
Mattel, Inc. 23,625 310,078

TRANSPORT SERVICES - 0.8%
C.H. Robinson Worldwide, Inc. 8,000 318,000
Expeditors International of Washington, Inc. 12,700 556,419

WATER UTILITY - 0.2%
Azurix Corporation* 28,000 250,250
-------------

TOTAL COMMON STOCK - 99.1%
(Cost $60,536,500) 113,524,726

REPURCHASE AGREEMENT - 1.2%
Fifth Third Bank 2 Party Repurchase
Agreement, 1.55%, due 01/03/00 1,326,215
-------------

TOTAL INVESTMENTS IN SECURITIES - 100.3%
(Cost $61,862,715) $114,850,941
=============

</TABLE>

* Securities are non-income producing

See Notes To Financial Statements

<PAGE>

ADVANCE CAPITAL I, INC. - BOND FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
- -------------------------------------------------
<TABLE>
<CAPTION>

S & P
CREDIT PRINCIPAL MARKET
FIXED INCOME SECURITIES RATING COUPON MATURITY AMOUNT VALUE
- ------------------------- ------ ------ ------ -------- --------
<S> <C> <C> <C> <C> <C>
ADVERTISING - 2.5%
Lamar Advertising Company B 9.625 12/01/06 $ 500,000 $ 515,041
News Corporation Ltd. BB+ 8.750 02/15/06 350,000 357,000

AEROSPACE / DEFENSE - 0.7%
Lockheed Martin Corporation BBB- 7.650 05/01/16 250,000 228,829

AIR TRANSPORT - 0.6%
Northwest Airlines, Inc. BB 8.700 03/15/07 200,000 191,254

AUTO PARTS - 1.4%
Federal-Mogul Corporation BB+ 7.750 07/01/06 500,000 492,500

AUTO & TRUCK - 5.0%
Ford Motor Company A+ 6.500 08/01/18 500,000 440,781
General Motors Corporation A 7.700 04/15/16 500,000 498,959
Lear Corporation BB+ 8.110 05/15/09 350,000 329,532
TRW, Inc. BBB 6.250 01/15/10 500,000 440,157

BANK - 6.3%
Bank of America Corp. A 7.800 09/15/16 500,000 497,286
Capital One Financial Corp. BB+ 7.250 05/01/06 150,000 143,031
Citicorp A+ 7.250 10/15/11 250,000 242,063
J.P. Morgan & Company A+ 6.250 01/15/09 400,000 367,131
National City Corporation A- 6.875 05/15/19 500,000 447,948
Swiss Bank Corp.-NY AA 7.375 07/15/15 500,000 479,540

BEVERAGE - 1.4%
Anheuser-Busch Companies, Inc. A+ 7.125 07/01/17 500,000 468,655

BROADCASTING / CABLE TV - 6.2%
Chancellor Media Corporation B+ 8.000 11/01/08 250,000 250,625
Charter Communications Holdings LLC B+ 8.625 04/01/09 500,000 466,808
CSC Holdings, Inc. BB- 9.875 02/15/13 500,000 519,750
Lenfest Communications, Inc. BB- 8.250 02/15/08 400,000 398,386
Time Warner, Inc. BBB 7.250 10/15/17 500,000 500,000

BUILDING MATERIALS - 0.7%
American Standard, Inc. BB- 7.375 04/15/05 250,000 235,409

</TABLE>

See Notes To Financial Statements

<PAGE>

ADVANCE CAPITAL I, INC. - BOND FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
- -------------------------------------------------
<TABLE>
<CAPTION>

S & P
CREDIT PRINCIPAL MARKET
FIXED INCOME SECURITIES RATING COUPON MATURITY AMOUNT VALUE
- ------------------------- ------ ------ ------ -------- --------
<S> <C> <C> <C> <C> <C>
CHEMICAL - 1.2%
Air Products and Chemicals, Inc. A 8.750 04/15/21 $ 250,000 $ 260,036
Witco Corporation BBB 7.750 04/01/23 200,000 168,017

DIVERSIFIED - 3.3%
Norsk Hydro ASA A 9.000 04/15/12 500,000 543,165
Service Corp. International BBB- 7.700 04/15/09 200,000 157,972
Tyco International Group SA A- 6.125 01/15/09 500,000 442,500

ELECTRIC & GAS UTILITIES - 9.1%
Calpine Corporation BB+ 7.625 04/15/06 550,000 523,557
Carolina Power & Light Company A 8.200 07/01/22 500,000 487,720
Duquesne Light Company BBB+ 7.550 06/15/25 250,000 226,763
Florida Power Corporation AA- 6.875 02/01/08 70,000 67,728
Long Island Lighting Company A- 8.200 03/15/23 250,000 241,627
Monongahela Power A+ 8.375 07/01/22 500,000 502,384
Ontario Hydro AA- 7.450 03/31/13 500,000 495,313
PG&E Corporation AA- 8.375 05/01/25 250,000 250,733
Potomac Edison Company A+ 7.750 02/01/23 95,000 91,025
Texas Utilities Company BBB+ 7.875 03/01/23 250,000 235,602

ENTERTAINMENT - 1.3%
Viacom, Inc. BBB- 7.500 07/15/23 500,000 457,281

FINANCIAL SERVICES - 4.0%
Fairfax Financial Holdings BBB+ 8.250 10/01/15 250,000 235,000
General Electric Capital Corporation AAA 8.000 08/20/14 250,000 244,229
Household Finance Corporation A 6.375 08/01/10 500,000 451,622
Sears Roebuck Acceptance Corp. A- 6.875 10/15/17 500,000 453,190

FOOD PROCESSING - 1.6%
Archer Daniels Midland Company AA- 7.125 03/01/13 100,000 95,784
Nabisco, Inc. BBB 7.050 07/15/07 500,000 469,985

FOREIGN GOVERNMENT - 2.8%
Province of Nova Scotia A- 7.250 07/27/13 500,000 499,375
Province of Quebec A+ 7.125 02/09/24 500,000 464,224

GROCERY - 0.7%
Great Atlantic & Pacific Tea Co. BBB- 7.700 01/15/04 250,000 242,551

</TABLE>

See Notes To Financial Statements

<PAGE>

ADVANCE CAPITAL I, INC. - BOND FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
- -------------------------------------------------
<TABLE>
<CAPTION>

S & P
CREDIT PRINCIPAL MARKET
FIXED INCOME SECURITIES RATING COUPON MATURITY AMOUNT VALUE
- ------------------------- ------ ------ ------ -------- --------
<S> <C> <C> <C> <C> <C>
HOMEBUILDING - 1.4%
Kaufman & Broad Home Corp. BB+ 7.750 10/15/04 $ 250,000 $ 235,872
U.S. Home Corporation BB- 8.875 02/15/09 250,000 228,846

HOTEL / GAMING - 4.5%
Harrah's Operating Co., Inc. BB+ 7.875 12/15/05 500,000 472,884
HMH Properties, Inc. BB 8.450 12/01/08 250,000 240,938
Mirage Resorts, Inc. BBB 6.750 08/01/07 500,000 444,858
Park Place Entertainment Corp. BB+ 7.875 12/15/05 400,000 378,307

INDUSTRIAL SERVICES - 0.6%
Coinmach Corporation B 11.750 11/15/05 200,000 208,915

INSURANCE - 3.8%
Ace INA Holdings A- 8.300 08/15/06 250,000 254,278
Aetna Services, Inc. A 7.125 08/15/06 500,000 481,869
Allstate Corporation A+ 7.500 06/15/13 250,000 244,920
CIGNA Corporation A 8.250 01/01/07 100,000 103,149
CNA Financial Corporation A- 6.950 01/15/18 250,000 215,021

MACHINERY - 0.6%
Caterpillar, Inc. A+ 9.000 04/15/06 100,000 107,159
Deere & Company A+ 8.950 06/15/19 100,000 105,500

MEDICAL SERVICES - 1.4%
Tenet Healthcare Corporation BB+ 8.000 01/15/05 500,000 480,301

NATURAL GAS - 2.1%
Columbia Energy Group BBB+ 7.320 11/28/10 500,000 473,941
Enron Corporation A 7.750 04/15/23 250,000 234,168

NEWSPAPER - 1.6%
Hollinger International, Inc. BB 8.625 03/15/05 500,000 494,245
Knight-Ridder, Inc. A 9.875 04/15/09 50,000 58,234

OILFIELD SERVICES - 1.8%
Offshore Logistics, Inc. BB 7.875 01/15/08 150,000 141,000
Parker Drilliing Company B+ 9.750 11/15/06 250,000 244,397
Pride International, Inc. BB 9.375 05/01/07 250,000 249,863

</TABLE>

See Notes To Financial Statements

<PAGE>

ADVANCE CAPITAL I, INC. - BOND FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
- -------------------------------------------------
<TABLE>
<CAPTION>

S & P
CREDIT PRINCIPAL MARKET
FIXED INCOME SECURITIES RATING COUPON MATURITY AMOUNT VALUE
- ------------------------- ------ ------ ------ -------- --------
<S> <C> <C> <C> <C> <C>
PACKAGING & CONTAINERS - 1.1%
Owens-Illinois, Inc. BB+ 8.100 05/15/07 $ 400,000 $ 382,069

PAPER & FOREST PRODUCTS - 1.3%
Weyerhaeuser Company A 6.950 08/01/17 500,000 458,962

PETROLEUM - 3.7%
Kerr-McGee Corporation BBB 7.000 11/01/11 500,000 471,520
Louisiana Land & Exploration Co. A- 7.650 12/01/23 200,000 190,357
Ocean Energy, Inc. BB- 8.875 07/15/07 250,000 247,545
Phillips Petroleum Company A- 6.650 07/15/18 400,000 355,102

RAILROAD - 1.1%
Burlington Northern Santa Fe BBB+ 8.750 02/25/22 250,000 264,903
Missouri Pacific Railroad Co. A- 9.400 12/15/00 100,000 102,298

RECREATION - 0.7%
Speedway Motorsports, Inc. B+ 8.500 08/15/07 250,000 233,661

RENTAL AUTO / EQUIPMENT - 0.5%
Hertz Corporation A- 6.625 05/15/08 200,000 187,308

RETAIL STORE - 1.1%
Michaels Stores, Inc. BB- 10.875 06/15/06 350,000 367,500

SECURITIES BROKERAGE - 4.8%
Bear Stearns Companies, Inc. A 7.000 07/06/18 250,000 221,381
Lehman Brothers Holdings, Inc. A 8.500 08/01/15 500,000 519,363
Merrill Lynch & Company, Inc. AA- 6.875 11/15/18 500,000 454,751
Morgan Stanley Dean Witter AA 7.250 10/15/23 500,000 449,547

SEMICONDUCTOR - 1.3%
Applied Materials, Inc. A- 7.125 10/15/17 500,000 463,632

STEEL - 1.2%
AK Steel Corporation BB 9.125 12/15/06 400,000 406,870

</TABLE>

See Notes To Financial Statements

<PAGE>

ADVANCE CAPITAL I, INC. - BOND FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
- -------------------------------------------------
<TABLE>
<CAPTION>
S & P
FIXED INCOME SECURITIES AND CREDIT PRINCIPAL MARKET
REPURCHASE AGREEMENT RATING COUPON MATURITY AMOUNT VALUE
- ---------------------------- ------ ------ ------ -------- --------
<S> <C> <C> <C> <C> <C>
TELECOMMUNICATIONS SERVICE - 7.4%
AT & T Corporation AA- 8.125 07/15/24 $ 250,000 $ 242,698
Global Crossings Ltd. BB 9.625 05/15/08 500,000 498,216
GTE Corporation A 8.750 11/01/21 500,000 537,632
MasTec, Inc. BB- 7.750 02/01/08 350,000 339,500
New York Telephone Company A+ 7.250 02/15/24 500,000 450,708
Sprint Capital Corp. BBB+ 6.900 05/01/19 500,000 457,073

TEXTILE - 0.9%
Interface, Inc. BB+ 7.300 04/01/08 150,000 137,250
WestPoint Stevens, Inc. BB 7.875 06/15/08 200,000 188,000

TOBACCO - 0.3%
Philip Morris Companies, Inc. A 6.375 02/01/06 100,000 90,984

TRANSPORTATION - 2.0%
Gulfmark Offshore, Inc. BB- 8.750 06/01/08 250,000 235,444
Sea Containers BB- 7.875 02/15/08 500,000 450,000

U.S. GOVERNMENT - 3.3%
U.S. Treasury - Bond 7.875 02/15/21 1,000,000 1,117,344
-------------
TOTAL FIXED-INCOME SECURITIES - 97.3%
(Cost $34,327,289) 33,438,351

REPURCHASE AGREEMENT - 0.3%
Fifth Third Bank 2 Party Repurchase
Agreement, 1.55%, 01/03/00 100,773
-------------
TOTAL INVESTMENTS IN SECURITIES - 97.6%
(Cost $34,428,062) $ 33,539,124
=============

</TABLE>

See Notes To Financial Statements

<PAGE>

ADVANCE CAPITAL I, INC. - BALANCED FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
- ------------------------------------------------
<TABLE>
<CAPTION>

MARKET
COMMON STOCK SHARES VALUE
- -------------------------------------------- --------------- ---------------
<S> <C> <C>
ADVERTISING - 0.6%
Catalina Marketing Corporation* 2,100 $ 243,075
Harte-Hanks, Inc. 3,000 65,250
Interpublic Group of Companies, Inc. 2,800 161,525
Lamar Advertising Company* 2,200 133,238
Omnicom Group, Inc. 1,500 150,000
Young & Rubicam, Inc. 3,700 261,775

AEROSPACE / DEFENSE - 0.8%
Boeing Company 9,740 403,601
General Dynamics Corporation 4,700 247,925
Honeywell International, Inc. 5,500 317,281
Lockheed Martin Corporation 6,000 131,250
United Technologies Corporation 4,400 286,000

AIR TRANSPORT - 0.1%
Air Express International Corp. 2,400 77,550
Southwest Airlines 4,000 64,500

APPAREL - 0.2%
Cintas Corporation 1,900 100,937
Quiksilver, Inc.* 4,500 69,750
VF Corporation 6,100 183,000

AUTO PARTS - 0.2%
Borg-Warner Automotive, Inc. 2,000 81,000
Dana Corporation 4,600 137,712
Genuine Parts Company 8,000 198,500

AUTO & TRUCK - 0.5%
Ford Motor Company 7,400 394,512
General Motors Corporation 5,400 392,512

BANK - 4.3%
Amsouth Bancorporation 8,232 158,980
Banc One Corporation 15,260 488,320
Bank of America Corporation 14,613 733,390
Bank of New York Company, Inc. 8,100 324,000
Chase Manhattan Corporation 9,680 752,015
City National Corporation 3,100 102,106
Community First Bankshares, Inc. 4,000 63,000
Fifth Third Bancorp 5,000 366,875
First Security Corporation 8,000 204,250
First Tennessee National Corporation 11,600 330,600
First Union Corporation 11,600 382,075
Firstar Corporation 10,500 221,812
Fleet Boston Financial Corporation 9,016 313,869
J.P. Morgan & Company 1,500 189,938
Mellon Bank Corporation 18,300 623,344
National City Corporation 6,500 153,969
North Fork Bancorporation 5,500 95,563
Northern Trust Corporation 3,400 180,200
PNC Bank Corporation 4,000 178,000
State Street Corporation 2,400 175,350
U.S. Bancorp 6,900 164,306
U.S. Trust Corporation 2,400 192,450
Wachovia Corporation 2,500 170,000
Wells Fargo Company 11,130 450,069
Wilmington Trust Corporation 3,500 168,875
Zions Bancorporation 1,500 88,781

BEVERAGE - 0.7%
Anheuser-Busch Companies, Inc. 7,400 524,475
Brown-Forman Corporation 4,000 229,000
Diageo PLC-ADR 4,800 153,600
PepsiCo, Inc. 9,000 317,250

BIOTECHNOLOGY - 1.3%
Amgen, Inc.* 3,400 204,212
Biogen, Inc.* 2,000 169,000
Human Genome Sciences, Inc.* 1,700 259,462
Idec Pharmaceuticals Corporation* 2,000 196,500
Immunex Corporation* 2,600 284,700
Incyte Pharmaceuticals, Inc.* 2,400 144,000

</TABLE>

See Notes To Financial Statements
27

<PAGE>

ADVANCE CAPITAL I, INC. - BALANCED FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
- ------------------------------------------------
<TABLE>
<CAPTION>

MARKET
COMMON STOCK SHARES VALUE
- --------------------------------------------- ---------------- ---------------
<S> <C> <C>
BIOTECHNOLOGY - 1.3% (Continued)
Millennium Pharmaceuticals, Inc.* 3,000 $ 366,000
PE Corp-Celera Genomics Group* 3,000 447,000
Protein Design Labs, Inc.* 1,000 70,000

BROADCASTING / CABLE TV - 1.7%
AMFM, Inc.* 2,400 187,800
Clear Channel Communications* 2,000 178,500
Cox Communications, Inc.* 3,432 176,748
Cumulus Media, Inc.* 3,400 172,550
Emmis Communications Corporation* 2,600 324,066
Entercom Communications Corporation* 2,300 152,375
Hispanic Broadcasting Corporation* 1,600 147,550
Infinity Broadcasting Corporation* 8,437 305,314
The Walt Disney Company 13,000 380,250
Time Warner, Inc. 2,000 144,625
Univision Communications, Inc.* 3,300 337,219
USA Networks, Inc.* 2,800 154,700
Westwood One, Inc.* 2,200 167,200
Young Broadcasting, Inc.* 1,500 76,500

BUILDING MATERIALS - 0.5%
Armstrong World Industries, Inc. 2,500 83,437
Dycom Industries, Inc.* 2,500 110,156
Huttig Building Products, Inc.* 2,333 11,521
Martin Marietta Materials 5,000 205,000
Masco Corporation 7,000 177,625
Modine Manufacturing Company 7,300 182,500

CHEMICAL - 1.5%
Cytec Industries, Inc.* 7,500 172,500
duPont, E.I. de Nemours & Co. 7,000 461,125
Ecolab, Inc. 4,300 168,237
Imperial Chemical Industries Plc 8,000 340,500
Lilly Industries, Inc. 2,500 33,594
MacDermid, Inc. 2,900 119,081
Rohm & Haas Company 11,000 447,563
Sherwin-Williams Company 9,500 199,500
Sigma-Aldrich Corporation 2,600 78,163
Union Carbide Corporation 2,100 140,175
Valspar Corporation 3,600 150,750
WD-40 Company 8,600 190,275

COMPUTER & PERIPHERALS - 1.7%
Cisco Systems, Inc.* 1,900 203,537
Comverse Technology, Inc.* 1,200 173,700
Diebold, Inc. 2,400 56,400
EMC Corporation* 2,000 218,500
Gateway, Inc.* 1,400 100,887
Hewlett-Packard Company 6,100 693,875
Microchip Technology, Inc.* 1,500 102,656
National Computer Systems, Inc. 2,900 109,113
Network Appliance, Inc.* 4,800 398,700
Synopsys, Inc.* 2,000 133,500
VERITAS Software Corporation* 3,900 558,188
Visual Networks, Inc.* 1,500 118,875

COMPUTER SOFTWARE & SERVICES - 4.1%
Adobe Systems, Inc. 2,400 161,400
Affiliated Computer Services, Inc.* 2,000 92,000
Automatic Data Processing, Inc. 8,000 431,000
BARRA, Inc.* 2,500 79,375
BEA Systems, Inc.* 1,500 104,906
BISYS Group, Inc.* 2,500 163,125
BMC Software, Inc.* 4,000 319,750
Cadence Design Systems, Inc.* 3,700 88,800
Check Point Software Technologies Ltd.* 1,800 357,750
Citrix Systems, Inc.* 3,600 442,800
CMGI, Inc.* 1,200 332,250
CNET, Inc.* 2,500 141,875
Compuware Corporation* 8,000 298,000
Concord Communications, Inc.* 1,500 66,562
DST Systems, Inc.* 1,500 114,469
Electronic Arts, Inc.* 2,000 168,000
FactSet Research Systems, Inc. 2,000 159,250

</TABLE>

See Notes To Financial Statements

<PAGE>

ADVANCE CAPITAL I, INC. - BALANCED FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
- ------------------------------------------------
<TABLE>
<CAPTION>

MARKET
COMMON STOCK SHARES VALUE
- ----------------------------------------------- -------------- ---------------
<S> <C> <C>
COMPUTER SOFTWARE & SERVICES - 4.1% (Continued)
First Data Corporation 4,500 $ 221,906
Great Plains Software, Inc.* 1,500 112,125
IMS Health Incorporated 3,700 100,594
Intuit, Inc.* 5,100 305,681
Iss Group, Inc.* 2,400 170,700
Keane, Inc.* 1,500 48,187
Legato Systems, Inc.* 3,000 206,438
Lycos Inc.* 2,300 182,994
Mercury Interactive Corporation* 2,000 215,875
National Data Corporation 800 27,150
National Instruments Corporation* 3,200 122,400
Network Associates, Inc.* 2,800 74,725
Oracle Corporation* 3,080 345,153
Progress Software Corporation* 3,300 187,275
Psinet, Inc.* 2,200 135,850
SEI Investments Company 2,100 249,933
Shared Medical Systems Corporation 900 45,844
SunGard Data Systems, Inc.* 3,000 71,250
Symantec Corporation* 3,000 175,875
Transaction Systems Architects, Inc.* 3,000 84,000
Visio Corporation* 1,500 71,250
WebTrends Corporation* 1,000 81,000
Whittman-Hart, Inc.* 2,700 144,788
Wind River Systems, Inc.* 3,000 110,250

DIVERSIFIED - 1.4%
Corning, Inc. 3,500 451,281
Crane Company 10,500 208,687
Danaher Corporation 1,500 72,375
Eaton Corporation 2,000 145,250
Illinois Tool Works 3,000 202,687
Minnesota Mining & Manufacturing 4,300 420,863
PPG Industries, Inc. 7,100 444,194
Roper Industries, Inc. 3,500 132,344
Textron, Inc. 3,000 230,063
Viad Corp. 4,400 122,650

DRUG - 3.0%
Abbott Laboratories 9,875 358,586
American Home Products Corp. 12,800 502,400
Astrazeneca Plc 5,500 229,625
BioChem Pharma, Inc.* 4,000 87,000
Biomatrix, Inc.* 2,000 38,500
Bristol-Myers Squibb Company 14,000 898,625
Cardinal Health, Inc. 2,700 129,262
Elan Corporation PLC-ADR* 3,000 88,500
Express Scripts, Inc.* 1,500 96,000
Gilead Sciences, Inc.* 1,700 92,012
Glaxo Wellcome Plc 4,000 223,500
MedImmune, Inc.* 1,700 281,988
Merck & Company, Inc. 12,000 806,250
Pharmacia & Upjohn, Inc. 7,000 315,000
QLT Phototherapeutics, Inc.* 2,000 117,500
Schering-Plough Corporation 7,000 296,625
Shire Pharmaceuticals Group PLC-ADR* 2,000 58,250
Warner-Lambert Company 5,500 450,656
Watson Pharmaceuticals, Inc.* 1,600 57,300

DRUGSTORE - 0.1%
CVS Corporation 1,600 63,800
Duane Reade, Inc.* 3,000 82,687

ELECTRIC & GAS UTILITIES - 2.6%
AES Corporation* 2,800 209,300
Carolina Power & Light Company 4,700 143,056
CMS Energy Corporation 6,300 196,481
Consolidated Edison Co. of N.Y. 5,400 186,300
Constellation Energy Group 5,700 165,300
Dominion Resources, Inc.* 7,000 274,750
Duke Energy Corporation 8,935 447,867
Edison International 10,500 274,969
FirstEnergy Corp. 4,500 102,094
Florida Progress Corporation 7,500 317,344
GPU, Inc. 3,600 107,100

</TABLE>

See Notes To Financial Statements

29
<PAGE>

ADVANCE CAPITAL I, INC. - BALANCED FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
- ------------------------------------------------
<TABLE>
<CAPTION>

MARKET
COMMON STOCK SHARES VALUE
- --------------------------------------------- ---------------- ---------------
<S> <C> <C>
ELECTRIC & GAS UTILITIES - 2.6% (Continued)
Hawaiian Electric Industries, Inc. 9,100 $ 262,762
New Century Energies, Inc. 4,700 142,763
PG & E Corporation 6,000 123,000
Reliant Energy, Inc. 12,800 292,800
Southern Company 14,000 329,000
TECO Energy, Inc. 16,200 300,713
Texas Utilities Company 9,300 330,731
Unicom Corporation 7,000 234,500

ELECTRICAL EQUIPMENT - 1.1%
Emerson Electric Company 6,000 344,250
General Electric Company 7,500 1,160,625
Hubbell Inc.-Class B 3,200 87,200
Littlefuse, Inc.* 3,500 84,930
Molex, Inc. 2,928 132,492
Rayovac Corporation* 4,300 81,163

ELECTRONICS - 1.1%
Flextronics International Ltd.* 2,400 110,400
Jabil Circuit, Inc.* 2,000 146,000
Macromedia* 2,000 146,250
Micrel, Inc.* 2,300 130,956
Sanmina Corporation* 1,900 189,763
Sawtek, Inc.* 2,000 133,125
SCI Systems, Inc.* 2,000 164,375
Symbol Technologies, Inc. 6,750 429,047
Teradyne, Inc.* 3,000 198,000
Waters Corporation* 3,000 159,000

ENTERTAINMENT - 0.1%
Premier Parks, Inc.* 3,300 95,288

ENVIRONMENTAL - 0.0%
Republic Services, Inc.* 3,000 42,750

FINANCIAL SERVICES - 2.9%
American Express Company 5,000 831,250
Associates First Capital Corporation 5,334 146,352
Capital One Financial Corporation 1,500 72,281
Citigroup, Inc. 16,600 924,412
Concord EFS, Inc.* 4,500 115,875
Dun & Bradstreet Corporation 11,700 345,150
Eaton Vance Corporation 3,500 133,000
Fannie Mae 11,800 736,762
Federated Investors 5,500 110,344
Finova Group, Inc. 2,000 71,000
Franklin Resources, Inc. 3,800 121,837
Freddie Mac 6,000 282,375
Morgan Stanley Dean Witter & Co. 4,000 571,000
Paychex, Inc. 5,062 202,480
Providian Financial Corporation 1,400 127,488
Waddell & Reed Financial, Inc. 5,000 135,625

FOOD PROCESSING - 1.0%
Campbell Soup Company 5,000 193,437
ConAgra, Inc. 5,622 127,549
General Mills, Inc. 9,800 350,350
Heinz (H.J.) Company 6,000 238,875
Hershey Foods Corp. 2,800 132,825
Kellogg Company 3,000 92,437
Quaker Oats Company 2,000 131,250
Ralston-Ralston Purina Group 6,000 167,250
Sara Lee Corporation 9,000 198,563
Tootsie Roll Industries, Inc. 3,422 112,712

FOOD WHOLESALERS - 0.1%
U.S. Foodservice* 7,000 117,250

FOREIGN TELECOMMUNICATIONS - 0.4%
BCE, Inc. 4,400 396,825
Reuters Group PLC-ADR 2,733 220,861

</TABLE>

See Notes To Financial Statements

<PAGE>

ADVANCE CAPITAL I, INC. - BALANCED FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
- ------------------------------------------------
<TABLE>
<CAPTION>

MARKET
COMMON STOCK SHARES VALUE
- -------------------------------------------- ----------------- ---------------
<S> <C> <C>
FURNITURE / HOME FURNISHINGS - 0.1%
HON INDUSTRIES, Inc. 3,300 $ 72,394
Leggett & Platt, Inc. 4,100 87,894

GROCERY - 0.1%
Albertson's, Inc. 6,900 222,525

HOMEBUILDING - 0.0%
Lennar Corporation 3,200 52,000

HOUSEHOLD PRODUCTS - 0.5%
Clorox Company 5,500 277,062
Newell Rubbermaid, Inc.* 7,000 203,000
Unilever N.V. 4,000 217,750
Whirlpool Corporation 3,500 227,719

INDUSTRIAL SERVICES - 0.6%
ACNielsen Corporation* 4,800 118,200
Apollo Group, Inc.* 3,050 61,191
DeVry, Inc.* 5,300 99,375
Equifax, Inc. 4,000 94,250
Iron Mountain, Inc.* 3,500 137,594
ITT Educational Services, Inc.* 2,200 33,962
Manpower, Inc. 3,000 112,875
Quintiles Transnational Corporation* 2,500 46,719
Robert Half International, Inc.* 2,250 64,266
Servicemaster Company 14,000 172,375

INSURANCE - 2.0%
Ace Ltd. 3,000 50,062
AFLAC, Inc. 4,800 226,500
Ambac Financial Group, Inc. 2,600 135,687
American General Corporation 6,500 493,187
American International Group, Inc. 5,000 540,625
E. W. Blanch Holdings, Inc. 1,500 91,875
Hartford Financial Services Group, Inc. 4,000 189,500
Lincoln National Corporation 5,000 200,000
Marsh & McLennan Companies, Inc. 6,600 631,538
MBIA, Inc. 3,000 158,438
Medical Assurance, Inc.* 3,500 74,156
MGIC Investment Corporation 3,800 228,713
Mutual Risk Management Ltd. 6,666 112,072
Protective Life Corporation 4,100 130,431
Radian Group, Inc. 2,200 105,050
XL Capital Ltd. 1,900 98,563

MACHINERY - 0.6%
Caterpillar, Inc. 3,600 169,425
Cognex Corporation* 3,100 120,900
Deere & Company 4,200 182,175
Donaldson Company, Inc. 4,800 115,500
Dover Corporation 7,000 317,625
IDEX Corporation 3,000 91,125
Parker-Hannifin Corporation 1,575 80,817

MEDICAL SERVICES - 0.1%
Lincare Holdings, Inc.* 2,000 69,375
Quest Diagnostics, Inc.* 3,500 106,969
Renal Care Group, Inc.* 3,000 70,125

MEDICAL SUPPLIES - 1.4%
Allergan, Inc. 1,900 94,525
ArthroCare Corporation* 1,400 85,400
Baxter International, Inc. 8,000 502,500
Becton Dickinson & Company 6,500 175,094
Biomet, Inc. 3,000 120,000
Boston Scientific Corporation* 2,800 61,250
Guidant Corporation 2,500 117,500
Hillenbrand Industries 5,500 174,281
Johnson & Johnson 3,518 328,054
Medical Manager Corporation* 1,000 84,250
Medtronic, Inc. 5,500 200,406
ResMed, Inc.* 2,800 116,900
Stryker Corporation 1,600 111,400
Sybron International Corp.* 4,000 98,750
VISX, Inc.* 1,500 77,625
Wesley Jessen Visioncare* 500 18,938

</TABLE>

See Notes To Financial Statements

<PAGE>

ADVANCE CAPITAL I, INC. - BALANCED FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
- ------------------------------------------------
<TABLE>
<CAPTION>

MARKET
COMMON STOCK SHARES VALUE
- --------------------------------------------- ---------------- ---------------
<S> <C> <C>
METAL FABRICATING - 0.6%
Alcoa, Inc. 8,500 $ 705,500
Kaydon Corporation 7,500 201,094
Lincoln Electric Holdings, Inc. 4,500 92,813

NATURAL GAS - 0.4%
Enron Corporation 10,800 479,250
The Williams Companies, Inc. 8,500 259,781

NEWSPAPER - 0.2%
Central Newspapers, Inc. 2,000 78,750
Gannett Company, Inc. 3,800 309,937

OFFICE EQUIPMENT & SUPPLIES - 0.6%
Avery Dennison Corporation 2,200 160,325
Pitney Bowes, Inc. 14,000 676,375
Xerox Corporation 10,300 233,681

OILFIELD SERVICES - 1.0%
Baker Hughes, Inc. 14,000 294,875
BJ Services Company* 3,900 163,069
Cooper Cameron Corporation* 3,400 166,387
Halliburton Company 8,000 322,000
Schlumberger Ltd. 6,680 374,915
Smith International, Inc.* 3,800 188,813
Veritas DGC, Inc.* 4,500 63,000
Weatherford International, Inc.* 2,800 111,825

PACKAGING & CONTAINER - 0.1%
Sealed Air Corporation* 2,000 103,625

PAPER & FOREST PRODUCTS - 0.8%
Consolidated Papers, Inc. 6,000 190,875
Georgia-Pacific Group 4,800 243,600
International Paper Company 8,000 451,500
Weyerhaeuser Company 6,400 459,600

PETROLEUM - 3.2%
Apache Corporation 2,700 99,731
BP Amoco PLC-ADR 17,792 1,055,288
Chevron Corporation 8,300 718,987
Devon Energy Corporation 1,500 49,312
Exxon Mobil Corporation 25,801 2,078,593
Repsol SA-ADR 10,200 237,150
Royal Dutch Petroleum Company 13,600 823,650
Texaco, Inc. 2,300 124,919

PRECISION INSTRUMENT - 0.4%
Dionex Corporation* 2,000 82,375
KLA-Tencor Corporation* 1,500 167,063
Millipore Corporation 5,000 193,125
PE Corp-PE Biosystems Group 2,000 240,625

PRINTING - 0.1%
Valassis Communications, Inc.* 3,900 164,775

PUBLISHING - 0.5%
McGraw-Hill Companies, Inc. 8,000 493,000
Meredith Corporation 3,700 154,244
Value Line, Inc. 5,700 205,200

RAILROAD - 0.3%
Kansas City Southern Ind., Inc. 4,500 335,812
Norfolk Southern Corporation 8,100 166,050

REAL ESTATE INVESTMENT MANAGEMENT - 0.1%
Jones Lang LaSalle, Inc.* 4,200 49,875
Security Capital Group, Inc. - Class B* 5,400 67,500
Trammell Crow Company* 6,500 75,563

REAL ESTATE INVESTMENT TRUST - 1.2%
Archstone Communities Trust 16,400 336,200
CarrAmerica Realty Corporation 6,000 128,250

</TABLE>

See Notes To Financial Statements

<PAGE>

ADVANCE CAPITAL I, INC. - BALANCED FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
- ------------------------------------------------
<TABLE>
<CAPTION>

MARKET
COMMON STOCK SHARES VALUE
- ----------------------------------------------- -------------- ---------------
<S> <C> <C>
REAL ESTATE INVESTMENT TRUST - 1.2% (Continued)
Duke Realty Investments, Inc. 10,200 $ 198,900
Equity Office Properties Trust 10,700 263,487
Equity Residential Properties Trust 2,000 85,375
Prologis Trust 18,908 363,979
Rouse Company 9,800 208,250
Simon Property Group, Inc. 6,400 146,800
Weingarten Realty Investors 5,200 202,475

RECREATION - 0.3%
Brunswick Corporation 6,000 133,500
Carnival Corporation 4,000 191,250
Harley-Davidson, Inc. 4,000 256,250

RESTAURANT - 0.2%
McDonald's Corporation 5,000 201,563
Starbucks Corporation* 8,000 194,000

RETAIL STORE - 1.9%
Bed Bath & Beyond, Inc.* 8,000 278,000
BJ's Wholesale Club, Inc.* 3,400 124,100
CDW Computer Centers, Inc.* 2,000 157,250
Circuit City Stores, Inc. 3,000 135,187
Dayton Hudson Corporation 6,000 440,625
Dollar General Corporation 12,206 277,686
Dollar Tree Stores, Inc.* 2,200 106,562
Family Dollar Stores 4,000 65,250
Harcourt General, Inc. 2,500 100,625
Kohl's Corporation* 1,000 72,188
Lands' End, Inc.* 2,200 76,450
Linens 'n Things, Inc.* 1,800 53,325
Ross Stores, Inc. 5,000 89,688
Staples, Inc.* 3,300 68,475
Tandy Corporation 5,000 245,938
The Men's Wearhouse, Inc.* 2,250 66,094
Tiffany & Company 4,600 410,550
TJX Companies, Inc. 4,400 89,925
Williams-Sonoma, Inc.* 3,500 161,000
Zale Corporation* 2,200 106,425

SECURITIES BROKERAGE - 0.6%
A.G. Edwards, Inc. 5,500 176,344
Bear Stearns Companies, Inc. 5,176 221,274
Charles Schwab Corporation 2,500 95,625
Investment Technology Group, Inc. 4,626 132,997
Legg Mason, Inc. 3,600 130,500
Merrill Lynch & Company, Inc. 2,400 199,950
Raymond James Financial, Inc. 3,500 65,188

SEMICONDUCTOR - 2.9%
Altera Corporation* 5,000 247,812
Analog Devices, Inc.* 2,900 269,700
Applied Materials, Inc.* 1,500 190,031
Applied Micro Circuits Corporation* 1,900 241,775
Broadcom Corporation* 500 136,187
Dallas Semiconductor Corporation 2,000 128,875
Intel Corporation 9,000 740,813
Lattice Semiconductor Corporation* 4,100 193,213
Linear Technology Corporation 2,400 171,750
Maxim Integrated Products, Inc.* 5,600 264,250
Motorola, Inc. 2,500 368,125
National Semiconductor Corp.* 2,800 119,875
PMC-Sierra, Inc.* 2,000 320,625
Qlogic Corporation* 1,000 159,875
SDL, Inc.* 2,000 436,000
Texas Instruments, Inc. 3,600 347,850
Vitesse Semiconductor Corporation* 5,000 262,188
Xilinx, Inc.* 8,400 381,938

STEEL - 0.3%
Nucor Corporation 7,800 427,538

TELECOMMUNICATIONS EQUIPMENT - 0.7%
ADC Telecommunications, Inc.* 2,000 145,125
American Tower Corporation 4,300 131,419
E-Tek Dynamics, Inc.* 1,500 201,937
General Instrument Corporation* 1,800 153,000
JDS Uniphase Corporation* 2,200 354,887
Pinnacle Holdings, Inc.* 3,000 127,125
Tellabs, Inc.* 1,300 83,444

</TABLE>

See Notes To Financial Statements

<PAGE>

ADVANCE CAPITAL I, INC. - BALANCED FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
- ------------------------------------------------
<TABLE>
<CAPTION>

MARKET
COMMON STOCK SHARES VALUE
- ---------------------------------------------- --------------- ---------------
<S> <C> <C>
TELECOMMUNICATIONS SERVICE - 3.6%
Allegiance Telecom, Inc.* 1,500 $ 138,375
ALLTEL Corporation 8,286 685,149
Bell Atlantic Corporation 8,200 504,812
BellSouth Corporation 10,000 468,125
Crown Castle International Corporation* 5,300 170,262
GTE Corporation 11,500 811,469
Intermedia Communications, Inc.* 3,400 131,962
McleodUSA, Inc.* 5,000 294,375
Nextel Communications, Inc.* 2,700 278,438
NEXTLINK Communications, Inc.* 3,000 249,188
NTL Incorporated* 1,000 124,750
SBC Communications, Inc. 18,896 921,180
Sprint Corporation 6,400 430,800
United States Cellular Corporation* 1,100 111,031
Viatel, Inc.* 3,300 176,963
Western Wireless Corporation* 3,200 213,600
Winstar Communications, Inc.* 2,000 150,500

THRIFT - 0.1%
Charter One Financial, Inc. 3,034 58,025
JSB Financial, Inc. 1,500 77,812

TOBACCO - 0.3%
Philip Morris Companies, Inc. 15,400 354,200
UST, Inc. 9,000 226,688

TOILETRIES / COSMETICS - 1.3%
Avon Products, Inc. 12,000 396,000
Colgate-Palmolive Company 8,000 520,000
Gillette Company 6,000 247,125
Int'l Flavors & Fragrances, Inc. 5,000 188,125
Kimberly-Clark Corporation 9,800 641,288
Proctor & Gamble Company 2,400 262,950

TOYS - 0.2%
Hasbro, Inc. 12,250 231,984
Mattel, Inc. 3,125 41,016

TRANSPORT SERVICES - 0.2%
C.H. Robinson Worldwide, Inc. 3,000 119,250
Expeditors International of Washington, Inc. 4,200 184,012

WATER UTILITY - 0.1%
American Water Works Co., Inc. 8,500 180,625
Azurix Corporation* 6,000 53,625
------------
TOTAL COMMON STOCK - 59.6%
(Cost $59,875,604) $ 100,863,578
============
</TABLE>

* Securities are non-income producing

See Notes To Financial Statements

<PAGE>

ADVANCE CAPITAL I, INC. - BALANCED FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
- -----------------------------------------------------
<TABLE>
<CAPTION>
S & P
CREDIT PRINCIPAL MARKET
FIXED INCOME SECURITIES RATING COUPON MATURITY AMOUNT VALUE
- --------------------------------------------- ------- ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
AEROSPACE / DEFENSE - 1.1%
B.F. Goodrich Company A- 6.800 02/01/18 $ 500,000 $ 436,859
Lockheed Martin Corporation BBB- 7.650 05/01/16 750,000 686,487
Raytheon Company BBB- 6.750 08/15/07 750,000 694,063

AIR TRANSPORT - 0.2%
Federal Express Corporation BBB+ 8.760 05/22/15 350,000 376,102

AUTO & TRUCK - 1.5%
Ford Motor Company A+ 6.500 08/01/18 1,000,000 881,561
General Motors Corporation A 7.700 04/15/16 1,000,000 997,917
TRW, Inc. BBB 6.250 01/15/10 750,000 660,236

BANK - 3.6%
Banc One Corporation A- 8.100 03/01/02 500,000 510,162
BankBoston Corporation A 7.375 09/15/06 500,000 499,255
Chase Manhattan Corp. A 6.750 08/15/08 750,000 710,068
Comerica Bank A- 7.125 12/01/13 750,000 764,378
First Union Corporation A- 8.000 08/15/09 500,000 499,815
MBNA America Bank, N.A. BBB 6.750 03/15/08 500,000 463,345
Republic New York Corporation A 7.000 03/22/11 500,000 465,745
Royal Bank of Scotland PLC A 6.375 02/01/11 500,000 463,750
Swiss Bank Corp.-NY AA 7.375 07/15/15 1,000,000 959,080
Wachovia Corporation A+ 6.375 02/01/09 750,000 693,784

BEVERAGE - 0.6%
Anheuser-Busch Companies, Inc. A+ 7.125 07/01/17 1,000,000 937,310

BUILDING MATERIALS - 0.3%
Masco Corporation A- 7.125 08/15/13 500,000 474,170

CHEMICAL - 1.2%
Monsanto Company A 8.875 12/15/09 1,000,000 1,095,788
Witco Corporation BBB 6.125 02/01/06 500,000 436,277
Witco Corporation BBB 7.750 04/01/23 500,000 420,042

COMPUTER & PERIPHERALS - 0.6%
Dell Computer Corporation BBB+ 6.550 04/15/08 1,000,000 935,926
</TABLE>

See Notes To Financial Statements

<PAGE>

ADVANCE CAPITAL I, INC. - BALANCED FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
- -----------------------------------------------------
<TABLE>
<CAPTION>
S & P
CREDIT PRINCIPAL MARKET
FIXED INCOME SECURITIES RATING COUPON MATURITY AMOUNT VALUE
- --------------------------------------------- ------- ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
COMPUTER SOFTWARE & SERVICES - 0.3%
Computer Associates International, Inc. BBB+ 6.500 04/15/08 $ 500,000 $ 449,646

DIVERSIFIED - 1.7%
Norsk Hydro ASA A 9.000 04/15/12 1,000,000 1,086,329
Service Corp. International BBB- 7.700 04/15/09 500,000 394,929
Tenneco, Inc. BBB- 8.125 06/15/17 500,000 530,000
Tyco International Group SA A- 6.375 06/15/05 1,000,000 932,540

ELECTRIC & GAS UTILITIES - 4.4%
Dayton Power & Light Company AA- 8.150 01/15/26 500,000 496,026
Delmarva Power & Light Co. A 8.500 02/01/22 500,000 496,454
Duke Energy Corporation AA- 6.375 03/01/08 500,000 467,261
Duquesne Light Company BBB+ 7.550 06/15/25 1,000,000 907,054
Enserch Corporation BBB 6.564 07/01/05 500,000 478,250
Florida Power Corporation AA- 8.000 12/01/22 500,000 492,672
Hydro-Quebec A+ 7.000 03/01/05 500,000 489,365
Jersey Central Power & Light Co. A+ 6.750 11/01/25 750,000 634,451
Potomac Edison Company A+ 7.750 05/01/25 500,000 477,619
Texas Utilities Company BBB+ 7.875 03/01/23 750,000 706,807
Union Electric Company AA- 8.750 12/01/21 500,000 517,316
Virginia Electric Power A 8.000 03/01/04 500,000 511,539
Western Resources, Inc. BBB 6.875 08/01/04 750,000 706,993

FINANCIAL SERVICES - 4.5%
American General Finance Corp. A+ 8.125 08/15/09 1,000,000 1,030,867
BHP Finance USA Ltd. A- 7.250 03/01/16 500,000 464,043
Dow Capital BV A 8.700 05/15/22 250,000 251,962
Fletcher Challenge Capital Canada, Inc. BBB 8.250 06/20/16 500,000 510,000
General Electric Capital Corporation AAA 8.300 09/20/09 500,000 529,853
General Electric Capital Corporation AAA 8.000 08/20/14 500,000 488,458
Household Finance Corporation A 6.375 08/01/10 1,000,000 903,244
IBM Credit Corporation A+ 6.750 12/24/07 500,000 475,372
Morgan Stanley Dean Witter A+ 6.750 10/15/13 750,000 686,296
Morgan Stanley Dean Witter A+ 6.750 10/15/13 250,000 228,765
Santander Finance Issuances A 6.375 02/15/11 1,000,000 883,829
Sears Roebuck Acceptance Corp. A- 6.875 10/15/17 1,250,000 1,132,975

</TABLE>

See Notes To Financial Statements

<PAGE>

ADVANCE CAPITAL I, INC. - BALANCED FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
- -----------------------------------------------------
<TABLE>
<CAPTION>
S & P
CREDIT PRINCIPAL MARKET
FIXED INCOME SECURITIES RATING COUPON MATURITY AMOUNT VALUE
- --------------------------------------------- ------- ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
FOOD PROCESSING - 0.6%
Nabisco, Inc. BBB 7.050 07/15/07 $ 1,000,000 $ 939,971

FOOD WHOLESALERS - 0.1%
Sysco Corporation AA- 7.250 04/15/07 250,000 248,136

FOREIGN GOVERNMENT - 1.5%
Province of Nova Scotia A- 7.250 07/27/13 1,000,000 998,750
Province of Quebec A+ 7.125 02/09/24 1,000,000 928,448
Province of Saskatchewan A 9.375 12/15/20 525,000 614,928

GROCERY - 0.3%
SUPERVALU INC. BBB+ 6.640 06/09/06 500,000 466,577

HOTEL / GAMING - 0.7%
Hilton Hotels Corporation BBB- 7.200 12/15/09 750,000 735,000
Mirage Resorts, Inc. BBB 7.250 08/01/17 500,000 421,159

INDUSTRIAL SERVICES - 0.3%
ServiceMaster Company BBB 7.100 03/01/18 500,000 434,631

INSURANCE - 1.8%
Ace INA Holdings A- 8.300 08/15/06 750,000 762,833
Allstate Corporation A+ 7.500 06/15/13 1,000,000 979,680
CIGNA Corporation A 8.250 01/01/07 750,000 773,616
MBIA, Inc. AA 9.375 02/15/11 500,000 568,498

MACHINERY - 0.6%
Case Corporation BBB- 7.250 01/15/16 500,000 500,000
Clark Equipment Company A- 8.000 05/01/23 500,000 488,858

MEDICAL SUPPLIES - 0.6%
Cardinal Health, Inc. A 6.000 01/15/06 500,000 461,106
Johnson & Johnson AAA 8.720 11/01/24 550,000 588,802

METALS & MINING - 0.3%
Placer Dome, Inc. BBB 7.750 06/15/15 500,000 480,000

</TABLE>

See Notes To Financial Statements

<PAGE>

ADVANCE CAPITAL I, INC. - BALANCED FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
- -----------------------------------------------------
<TABLE>
<CAPTION>
S & P
CREDIT PRINCIPAL MARKET
FIXED INCOME SECURITIES RATING COUPON MATURITY AMOUNT VALUE
- --------------------------------------------- ------- ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
NATURAL GAS - 1.2%
Columbia Energy Group BBB+ 7.320 11/28/10 $ 1,000,000 $ 947,882
Enron Corporation BBB+ 7.000 08/15/23 750,000 644,405
Southwestern Energy Company BBB+ 6.700 12/01/05 500,000 476,093

NEWSPAPER - 0.1%
Knight-Ridder, Inc. A 9.875 04/15/09 100,000 116,468

OFFICE EQUIPMENT & SUPPLIES - 0.1%
Xerox Corporation A 9.750 03/15/00 200,000 201,243

OILFIELD SERVICES - 0.8%
Noble Drilling Corporation A- 7.500 03/15/19 750,000 696,628
Smith International, Inc. BBB+ 7.000 09/15/07 750,000 716,564

PACKAGING & CONTAINER - 0.2%
Crown Cork & Seal Company, Inc. BBB 8.375 01/15/05 390,000 398,876

PAPER & FOREST PRODUCTS - 0.4%
Weyerhaeuser Company A 6.950 08/01/17 750,000 688,444

PETROLEUM - 1.2%
Atlantic Richfield Company A 8.500 04/01/12 750,000 806,092
Louisiana Land & Exploration Co. A- 7.625 04/15/13 750,000 737,102
Phillips Petroleum Company A- 8.860 05/15/22 500,000 512,851

PUBLISHING - 0.3%
News America Holdings BBB- 8.000 10/17/16 500,000 500,795

RAILROAD - 0.5%
Burlington Northern Santa Fe BBB+ 8.750 02/25/22 750,000 794,709

RENTAL AUTO / EQUIPMENT - 0.3%
Hertz Corporation A- 6.625 05/15/08 500,000 468,269

RESTAURANT - 0.3%
Darden Restaurants, Inc. BBB+ 7.125 02/01/16 500,000 464,508

</TABLE>

See Notes To Financial Statements

<PAGE>

ADVANCE CAPITAL I, INC. - BALANCED FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
- -----------------------------------------------------
<TABLE>
<CAPTION>
S & P
FIXED INCOME SECURITIES AND CREDIT PRINCIPAL MARKET
REPURCHASE AGREEMENT RATING COUPON MATURITY AMOUNT VALUE
- --------------------------------------------- ------- ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
RETAIL STORE - 0.9%
Dayton Hudson Corporation A- 9.625 02/01/08 $ 200,000 $ 223,461
Dillard's, Inc. BBB 7.850 10/01/12 750,000 695,155
J.C. Penney Company BBB+ 8.250 08/15/22 500,000 442,653
Pep Boys-Manny, Moe & Jack BBB- 7.000 06/01/05 350,000 322,206

SECURITIES BROKERAGE - 1.3%
Bear Stearns Companies, Inc. A 7.250 10/15/06 750,000 730,700
Lehman Brothers Holdings, Inc. A 8.500 08/01/15 750,000 779,045
Merrill Lynch & Company, Inc. AA- 7.190 08/07/12 750,000 686,517

SEMICONDUCTOR - 0.5%
Applied Materials, Inc. A- 7.125 10/15/17 1,000,000 927,263

TELECOMMUNICATIONS SERVICE - 3.6%
AT&T Corporation AA- 6.000 03/15/09 750,000 681,761
Bell Canada A+ 9.500 10/15/10 750,000 846,322
GTE Corporation A 6.460 04/15/08 500,000 469,504
MCI WorldCom, Inc. A- 7.750 03/15/24 750,000 707,725
Michigan Bell Telephone AAA 7.500 02/15/23 750,000 702,135
New York Telephone Company A+ 7.375 12/15/11 1,000,000 956,367
Sprint Capital Corp. BBB+ 6.900 05/01/19 1,000,000 914,147
Vodafone Airtouch PLC A 7.500 07/15/06 1,000,000 997,561

TOBACCO - 0.2%
Philip Morris Companies, Inc. A 9.000 01/01/01 400,000 404,888

U.S. GOVERNMENT - 0.6%
U.S. Treasury - Bond 6.625 05/15/07 1,000,000 1,003,593
-----------------
TOTAL FIXED-INCOME SECURITIES - 39.3%
(Cost $70,305,607) 66,475,960

REPURCHASE AGREEMENT - 0.2%
Fifth Third Bank 2 Party Repurchase
Agreement, 1.55%, due 01/03/00 404,459

TOTAL COMMON STOCK - 59.6%
(Cost $59,875,604) 100,863,578
-----------------
TOTAL INVESTMENTS IN SECURITIES - 99.1%
(Cost $130,585,670) $ 167,743,997
================
</TABLE>

See Notes To Financial Statements

<PAGE>

AEROSPACE / DEFENSE - 1.4%
AAR Corporation BBB 10/15/03 7.250 500,000 478,927
Boeing Co. AA- 04/01/12 9.750 1,000,000 1,164,370
Lockheed Martin Corporation BBB- 03/15/23 7.875 500,000 490,101
Lockheed Martin Corporation BBB- 04/15/23 7.750 1,000,000 880,720

AIR TRANSPORT - 2.8%
AMR Corporation BBB- 03/15/00 9.750 100,000 100,551
AMR Corporation BBB- 08/01/12 9.000 1,000,000 1,056,068
Continental Airlines, Inc. BB- 12/15/05 8.000 1,230,000 1,129,813
Delta Air Lines, Inc. BBB- 02/01/11 10.375 500,000 576,425
Federal Express Corporation BBB+ 01/01/15 7.630 1,000,000 984,863
Northwest Airlines, Inc. BB 03/15/07 8.700 1,000,000 956,270
United Airlines, Inc. BB+ 08/15/21 9.750 500,000 563,984
United Airlines, Inc. BB+ 07/15/21 10.250 500,000 565,276

AUTO PARTS - 0.9%
Federal-Mogul Corporation BB+ 07/01/06 7.750 1,000,000 985,000
Titan Wheel International, Inc. B+ 04/01/07 8.750 1,000,000 950,000

AUTO & TRUCK - 1.9%
Ford Motor Company A+ 11/15/22 8.875 2,000,000 2,075,461
General Motors Corporation A 06/15/24 8.100 1,000,000 1,009,120
Lear Corporation BB+ 05/15/09 8.110 1,000,000 941,519

BANK - 7.2%
ABN AMRO Bank NV AA- 12/01/26 7.300 500,000 454,391
Banc One Corporation A- 07/15/25 7.750 1,000,000 974,792
Bank of America Corp. A 07/15/15 10.200 1,000,000 1,216,266
Bank of America Corp. A 03/01/09 7.125 1,000,000 970,860
BankBoston Corporation A- 12/01/05 6.625 1,000,000 950,983
Bankers Trust Corporation A+ 11/15/15 7.500 1,500,000 1,423,833
Chase Manhattan Corp. A 10/15/08 6.125 1,000,000 905,899
Citicorp A+ 10/15/11 7.250 1,000,000 968,252
Comerica Bank A- 12/01/13 7.125 1,000,000 1,019,170
Dresdner Bank - New York AA- 09/15/15 7.250 1,000,000 939,210

</TABLE>

See Notes To Financial Statements

40
<PAGE>

ADVANCE CAPITAL I, INC. - RETIREMENT INCOME FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
- ---------------------------------------------------------
<TABLE>
<CAPTION>
S & P
CREDIT MATURITY PRINCIPAL MARKET
FIXED INCOME SECURITIES RATING DATE COUPON AMOUNT VALUE
- -------------------------------------------- --------- ------- -------- ------------ --------------
<S> <C> <C> <C> <C> <C>
BANK - 7.2% (Continued)
First Union Corporation A- 08/15/09 8.000 $ 500,000 $ 499,815
JPM Capital Trust II A 02/01/27 7.950 1,000,000 953,630
KeyCorp BBB+ 03/15/06 6.750 1,000,000 957,813
Republic New York Corporation A 05/15/21 9.125 1,000,000 1,088,514
Royal Bank of Scotland PLC A 02/01/11 6.375 1,000,000 927,500
Swiss Bank Corporation-NY AA 06/15/17 7.375 1,000,000 956,920

BEVERAGE - 0.7%
Anheuser-Busch Companies, Inc. A+ 07/01/17 7.125 1,500,000 1,405,964

BROADCASTING / CABLE TV - 7.5%
CBS Corporation BBB- 08/01/12 8.625 750,000 793,735
Century Communications Corp. BB- 03/01/05 9.500 1,000,000 1,001,705
Century Communications Corp. BB- 02/15/02 9.750 250,000 250,415
Chancellor Media Corporation B 06/15/07 8.750 1,250,000 1,281,606
Charter Communications Holdings LLC B+ 04/01/09 8.625 1,500,000 1,400,425
Comcast Corp. BBB- 05/15/05 9.375 500,000 528,970
Comcast Corp. BBB- 01/15/08 9.500 500,000 515,000
Continental Cablevision, Inc. BBB 08/01/13 9.500 500,000 550,395
CSC Holdings, Inc. BB+ 02/15/18 7.875 500,000 476,318
CSC Holdings, Inc. BB- 05/15/06 9.875 750,000 789,480
Fox Family Worldwide, Inc. B 11/01/07 9.250 1,250,000 1,148,276
Jones Intercable, Inc. BBB- 04/01/07 8.875 500,000 523,925
Jones Intercable, Inc. BB+ 03/01/08 10.500 700,000 725,566
Lenfest Communications, Inc. BB+ 11/01/05 8.375 1,000,000 1,022,320
Rogers Cablesystems Ltd. BB+ 03/15/05 10.000 500,000 547,380
Rogers Cablesystems Ltd. BB+ 12/01/07 10.000 500,000 533,750
Sinclair Broadcast Group, Inc. B 09/30/05 10.000 1,000,000 986,983
Turner Broadcasting System, Inc. BBB 07/01/13 8.375 750,000 774,952
Time Warner, Inc. BBB 01/15/13 9.125 1,000,000 1,090,440
Young Broadcasting, Inc. B 06/15/07 8.750 750,000 708,611

BUILDING MATERIALS - 0.9%
American Standard, Inc. BB- 02/01/08 7.375 1,000,000 910,027
Building Materials Corp. BB 10/15/07 8.000 1,000,000 921,097

CHEMICAL - 1.6%
Eastman Chemical Company BBB+ 01/15/24 7.250 1,000,000 970,000
Union Carbide Chemicals & Plastics Co. BBB 04/01/23 7.875 600,000 586,960
Witco Corporation BBB 02/01/06 6.125 500,000 436,277
Witco Corporation BBB 04/01/23 7.750 1,500,000 1,260,125

</TABLE>

See Notes To Finanical Statements

<PAGE>

COMPUTER SOFTWARE & SERVICES - 0.5%
International Business Machines Corp. A+ 11/01/19 8.375 1,000,000 1,086,225

DIVERSIFIED - 1.8%
Mark IV Industries, Inc. BB- 09/01/07 7.500 1,000,000 907,986
Norsk Hydro ASA A 04/15/12 9.000 1,500,000 1,629,494
Service Corp. International BBB- 04/15/09 7.700 1,550,000 1,224,280

ELECTRIC & GAS UTILITIES - 8.7%
Alabama Power Company A+ 12/01/24 9.000 1,000,000 1,040,330
Calpine Corporation BB+ 04/01/08 7.875 1,000,000 952,386
Dayton Power & Light Company AA- 01/15/26 8.150 1,000,000 992,051
Duke Energy Corporation AA- 08/01/25 6.750 1,000,000 868,785
Hydro-Quebec A+ 01/15/22 8.400 850,000 894,459
Indianapolis Power & Light Co. AA- 02/01/24 7.050 1,000,000 901,875
Jersey Central Power & Light Co. A+ 11/01/25 6.750 1,000,000 845,935
New Orleans Public Service, Inc. BBB 03/01/23 8.000 600,000 580,444
Northern Illinois Gas Company AA 08/15/21 8.875 1,000,000 1,032,569
Oklahoma Gas & Electric Company A+ 10/15/25 7.300 1,500,000 1,372,458
PG&E Corporation AA- 03/01/26 7.250 1,000,000 906,771
Potomac Edison Company A+ 06/01/24 8.000 1,000,000 977,593
Potomac Electric Power Company A 06/01/21 9.000 1,000,000 1,020,779
Public Service Electric & Gas A- 09/01/24 7.000 1,000,000 894,738
Rocheseter Gas & Electric Corporation A- 04/01/21 9.375 1,000,000 1,038,073
Southern California Gas Company AA- 10/01/21 8.750 1,000,000 1,021,750
Virginia Electric Power A 10/01/24 8.625 1,000,000 1,005,867
West Penn Power Company A+ 08/01/24 8.125 1,000,000 1,000,160
Western Resources, Inc. A- 04/15/23 7.650 1,000,000 923,122

ELECTRONICS - 0.4%
Koninklijke Philips Electronics N.V. BBB+ 08/15/13 7.250 1,000,000 935,035

ENTERTAINMENT - 0.5%
Viacom, Inc. BBB- 08/01/22 8.250 1,000,000 978,954

ENVIRONMENTAL - 1.3%
American Eco Corporation B 05/15/08 9.625 1,000,000 600,000
Laidlaw, Inc. BBB 05/15/23 8.250 1,000,000 927,029
Laidlaw, Inc. BBB 04/15/07 11.500 1,000,000 1,108,974

</TABLE>

See Notes To Financial Statements

<PAGE>

ADVANCE CAPITAL I, INC. - RETIREMENT INCOME FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
- ---------------------------------------------------------
<TABLE>
<CAPTION>
S & P
CREDIT MATURITY PRINCIPAL MARKET
FIXED INCOME SECURITIES RATING DATE COUPON AMOUNT VALUE
- -------------------------------------------- --------- ------- -------- ------------ --------------
<S> <C> <C> <C> <C> <C>
FINANCIAL SERVICES - 3.8%
Auburn Hills Trust A+ 05/01/20 12.000 $ 400,000 $ 577,635
BHP Finance USA Ltd. A- 03/01/16 7.250 1,000,000 928,085
CRA Finance, Ltd. AA- 12/01/13 7.125 500,000 465,918
Dow Capital BV A 05/15/22 8.700 1,000,000 1,007,849
Fairfax Financial Holdings BBB+ 10/01/15 8.250 1,500,000 1,410,000
Fletcher Challenge Capital Canada, Inc. BBB 06/20/16 8.250 1,000,000 1,020,000
Household Finance Corporation A 08/01/10 6.375 1,000,000 903,244
Morgan Stanley Dean Witter A+ 10/15/13 6.750 1,250,000 1,143,827
Sears Roebuck Acceptance Corp. A- 10/15/17 6.875 500,000 453,190

FOOD PROCESSING - 1.1%
Chiquita Brands Int'l, Inc. B+ 01/15/04 9.625 1,000,000 750,000
ConAgra, Inc. BBB 03/01/21 9.750 500,000 574,791
Nabisco, Inc. BBB 06/15/15 7.550 1,000,000 945,329

FOREIGN GOVERNMENT - 2.1%
Province of Newfoundland A- 10/22/22 8.650 1,000,000 1,060,000
Province of Nova Scotia A- 07/27/13 7.250 1,000,000 998,750
Province of Quebec A+ 12/01/26 8.625 1,115,000 1,214,653
Province of Saskatchewan A 02/01/13 8.000 1,000,000 1,032,560

GROCERY - 0.9%
Great Atlantic & Pacific Tea Co. BBB- 04/15/07 7.750 1,000,000 913,417
Kroger Company BBB- 03/01/08 7.450 1,000,000 972,798

HOMEBUILDING - 3.8%
Beazer Homes USA, Inc. B+ 04/01/08 8.875 1,000,000 923,101
D.R. Horton, Inc. BB 04/15/06 10.000 1,000,000 1,017,932
Engle Homes, Inc. B 02/01/08 9.250 1,000,000 920,000
Kaufman & Broad Home Corp. BB+ 10/15/04 7.750 1,000,000 943,490
MDC Holdings, Inc. BB 02/01/08 8.375 1,500,000 1,381,007
Ryland Group, Inc. B+ 06/01/04 9.625 1,000,000 971,939
Standard Pacific Corp. BB 06/15/07 8.500 1,000,000 957,922
U.S. Home Corporation BB- 08/15/07 8.880 1,000,000 926,556

HOTEL / GAMING - 4.9%
Boyd Gaming Corporation BB- 10/01/03 9.250 1,000,000 1,020,000
Harrah's Operating Co., Inc. BB+ 12/15/05 7.875 1,500,000 1,418,652
Hilton Hotels Corporation BBB- 12/15/09 7.200 1,500,000 1,470,000
HMH Properties, Inc. BB 12/01/08 8.450 1,000,000 963,750
Host Marriott Travel Plaza BB- 05/15/05 9.500 1,000,000 999,902

</TABLE>

See Notes To Financial Statements

<PAGE>

INDUSTRIAL SERVICES - 0.5%
Coinmach Corporation B 11/15/05 11.750 1,000,000 1,044,576

INSURANCE - 4.6%
Ace INA Holdings A- 08/15/06 8.300 1,000,000 1,017,110
Aetna Services, Inc. A 01/15/17 8.000 824,000 832,240
American Financial Group, Inc. BBB+ 12/15/07 7.125 1,000,000 975,000
CIGNA Corporation A 03/01/23 7.650 500,000 480,290
CNA Financial Corporation A- 01/15/18 6.950 500,000 430,042
CNA Financial Corporation A- 11/15/23 7.250 1,000,000 950,000
Continental Corporation BBB- 08/15/12 8.375 600,000 603,216
Loews Corporation AA- 10/15/23 7.000 1,000,000 867,658
MBIA, Inc. AA 10/01/22 8.200 2,000,000 1,966,511
Metropolitan Life Insurance Co.* A+ 11/01/23 7.450 550,000 494,836
New York Life Insurance Company AA- 12/15/23 7.500 1,000,000 980,000

MACHINERY - 0.2%
Clark Equipment Company A- 05/01/23 8.000 500,000 488,858

MEDICAL SERVICES - 0.7%
HEALTHSOUTH Corporation BBB- 04/01/01 9.500 500,000 492,010
Tenet Healthcare Corporation BB- 01/15/07 8.625 1,000,000 973,250

MEDICAL SUPPLIES - 0.3%
Cardinal Health, Inc. A 02/15/04 6.500 700,000 675,183

METALS & MINING - 1.2%
Alcan Aluminum Ltd. A- 01/15/22 8.875 1,000,000 1,062,500
Inco Ltd. BB+ 06/15/22 9.600 500,000 470,000
Placer Dome, Inc. BBB 06/15/15 7.750 1,000,000 960,000

MORTGAGED BACK SECURITIES - 2.5%
Ginnie Mae AAA 12/20/28 6.500 1,896,194 1,772,941
Ginnie Mae AAA 01/20/29 6.500 2,866,882 2,680,535
Ginnie Mae AAA 11/20/28 6.500 934,507 873,765

</TABLE>

See Notes To Financial Statements

<PAGE>

ADVANCE CAPITAL I, INC. - RETIREMENT INCOME FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
- ---------------------------------------------------------
<TABLE>
<CAPTION>
S & P
CREDIT MATURITY PRINCIPAL MARKET
FIXED INCOME SECURITIES RATING DATE COUPON AMOUNT VALUE
- -------------------------------------------- --------- ------- -------- ------------ --------------
<S> <C> <C> <C> <C> <C>
NATURAL GAS - 2.6%
AmeriGas Partners, L.P. BB+ 04/15/07 10.125 $ 1,200,000 $ 1,229,117
ANR Pipeline Company BBB+ 11/01/21 9.625 1,000,000 1,147,459
Columbia Energy Group BBB+ 11/28/10 7.320 1,000,000 947,882
Ferrellgas Partners, L.P. B+ 06/15/06 9.375 500,000 491,923
Louis Dreyfus Natural Gas Corp. BB+ 06/15/04 9.250 1,000,000 1,011,095
TransCanada Pipelines Ltd. A- 04/01/23 7.875 600,000 580,603

NEWSPAPER - 0.5%
Hollinger International, Inc. BB- 02/01/06 9.250 500,000 494,521
Hollinger International, Inc. BB- 03/15/07 9.250 500,000 491,967

OILFIELD SERVICES - 2.4%
Husky Oil, Ltd. BBB 11/15/16 7.550 1,000,000 907,638
Kerr-McGee Corporation BBB 11/01/11 7.000 1,500,000 1,369,719
Offshore Logistics, Inc. BB 01/15/08 7.875 1,200,000 1,128,000
Parker Drilliing Company B+ 11/15/06 9.750 750,000 733,192
Pride International, Inc. BB 05/01/07 9.375 1,000,000 999,453

PACKAGING & CONTAINERS - 1.2%
Crown Cork & Seal Company, Inc. BBB 04/15/23 8.000 1,500,000 1,405,583
Owens-Illinois Inc. BB+ 05/15/07 8.100 750,000 716,380
Owens Illinois, Inc. BB+ 05/15/18 7.800 500,000 429,127

PAPER & FOREST PRODUCTS - 1.5%
Bowater, Inc. BBB 10/15/12 9.500 700,000 769,257
Champion International Corporation BBB 09/01/23 7.625 1,500,000 1,363,086
Georgia-Pacific Corporation BBB- 07/01/22 9.125 1,000,000 1,017,835

PETROLEUM - 2.1%
Clark USA, Inc. B 12/01/05 10.875 500,000 375,000
Louisiana Land & Exploration Co. A- 04/15/13 7.625 1,000,000 982,803
Ocean Energy Inc. BB+ 07/01/05 7.625 500,000 477,025
Ocean Energy, Inc. BB- 08/01/05 8.625 1,000,000 991,722
Phillips Petroleum Company A- 01/01/23 8.490 1,000,000 1,004,139
Ultramar Diamond Shamrock Corp. BBB 04/01/23 8.000 600,000 570,755

PUBLISHING - 0.8%
News America Holdings BBB- 08/10/18 8.250 1,000,000 1,007,347
Primedia, Inc. BB- 06/01/04 10.250 750,000 769,841

</TABLE>

See Notes To Financial Statements

<PAGE>

RECREATION - 1.4%
Brunswick Corporation BBB+ 09/01/23 7.375 975,000 984,750
Speedway Motorsports, Inc. B+ 08/15/07 8.500 1,000,000 934,646
The Sports Club Company, Inc. B 03/15/06 11.375 1,000,000 995,000

RENTAL AUTO / EQUIPMENT - 0.4%
Hertz Corporation A- 05/15/08 6.625 1,000,000 936,538

RESTAURANT - 0.7%
Darden Restaurants, Inc. BBB+ 02/01/16 7.125 1,500,000 1,393,525

RETAIL STORE - 4.6%
Dayton Hudson Corporation A- 12/01/22 8.500 1,500,000 1,514,508
Dillard's Inc. BBB 10/01/12 7.850 1,500,000 1,390,311
J.C. Penney Company BBB+ 04/01/17 7.950 1,000,000 885,092
May Department Stores A+ 07/15/26 8.300 1,000,000 998,166
Michaels Stores, Inc. BB- 06/15/06 10.875 1,000,000 1,050,000
Pep Boys-Manny, Moe & Jack BBB- 06/01/05 7.000 1,000,000 920,590
Sears, Roebuck & Company A- 11/01/11 9.375 1,000,000 1,120,428
The Limited, Inc. BBB+ 03/15/23 7.500 1,000,000 817,734
Venator Group, Inc. BB 06/01/00 7.000 1,000,000 995,255

SECURITIES BROKERAGE - 2.4%
Bear Stearns Companies, Inc. A 01/15/04 6.625 1,000,000 969,138
Goldman Sachs Group LP A+ 03/01/13 8.000 1,000,000 993,658
Lehman Brothers, Inc. A 05/15/05 11.625 1,023,000 1,188,255
Morgan Stanley Dean Witter A+ 10/01/13 7.000 1,000,000 936,534
Paine Webber Group, Inc. BBB+ 02/15/14 7.625 1,000,000 943,496

SEMICONDUCTOR - 0.6%
Applied Materials, Inc. A- 10/15/17 7.125 1,250,000 1,159,079

SHOE - 0.5%
Brown Shoe Company, Inc. BB 10/15/06 9.500 1,000,000 1,006,658

STEEL - 0.9%
AK Steel Corporation BB 12/15/06 9.125 1,000,000 1,017,175
USX Corporation BBB- 02/15/12 9.375 750,000 829,013

</TABLE>

See Notes To Financial Statements

<PAGE>

ADVANCE CAPITAL I, INC. - RETIREMENT INCOME FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
- ---------------------------------------------------------
<TABLE>
<CAPTION>
S & P
FIXED INCOME SECURITIES AND CREDIT MATURITY PRINCIPAL MARKET
REPURCHASE AGREEMENT RATING DATE COUPON AMOUNT VALUE
- -------------------------------------------- --------- ------- -------- ------------ --------------
<S> <C> <C> <C> <C> <C>
TELECOMMUNICATIONS SERVICE - 5.3%
AT & T Corporation AA- 07/15/24 8.125 $ 800,000 $ 776,633
AT&T Corporation AA- 01/15/22 8.125 750,000 729,204
GCI, Inc. B+ 08/01/07 9.750 1,000,000 967,528
Global Crossings Ltd. BB 05/15/08 9.625 1,000,000 996,432
GTE Corporation A 11/01/21 8.750 1,500,000 1,612,895
Illinois Bell Telephone Company AAA 03/15/24 7.250 1,425,000 1,297,225
MasTec, Inc. BB- 02/01/08 7.750 1,500,000 1,455,000
MCI WorldCom, Inc. A- 03/15/24 7.750 1,000,000 943,634
New Jersey Bell Telephone AA 06/01/12 7.375 1,000,000 966,250
New York Telephone Company A+ 12/15/11 7.375 500,000 478,184
SBC Communications Capital Corp. AA 07/15/25 7.250 1,000,000 906,759

TEXTILE - 0.5%
WestPoint Stevens Inc. BB 06/15/05 7.875 1,000,000 950,000

TOBACCO - 0.2%
Philip Morris Companies, Inc. A 01/15/17 8.375 547,000 509,888

TRANSPORTATION - 0.8%
Gulfmark Offshore, Inc. BB- 06/01/08 8.750 750,000 706,334
Sea Containers BB- 12/01/04 12.500 1,000,000 1,020,000

U.S. GOVERNMENT - 0.5%
U.S. Treasury - Bond 08/15/26 6.750 1,000,000 1,004,375
----------------
TOTAL FIXED INCOME SECURITIES - 97.7%
(Cost $214,010,341) 204,890,450

REPURCHASE AGREEMENT - 0.3%
Fifth Third Bank 2 Party Repurchase
Agreement, 1.55%, due 01/03/00 642,552
----------------
TOTAL INVESTMENTS IN SECURITIES - 98.0%
(Cost $214,652,893) $ 205,533,002
================
</TABLE>

* Security exempt from registration under Rule 144A of the
Securities Act of 1933

See Notes To Financial Statements

<PAGE>

ADVANCE CAPITAL I, INC. - CORNERSTONE STOCK FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
- ---------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
COMMON STOCK SHARES VALUE
- ----------------------------------------------- ------------ ------------
<S> <C> <C>
AUTO & TRUCK - 0.9%
Ford Motor Company 8,500 $ 453,156

BANK - 2.5%
Bank of America Corporation 16,300 818,056
Wells Fargo Company 11,800 477,162

BEVERAGE - 1.6%
Coca-Cola Company 14,600 850,450

BIOTECHNOLOGY - 1.3%
Amgen, Inc.* 8,600 516,537
Biogen, Inc.* 2,100 177,450

BROADCASTING / CABLE TV - 2.5%
Comcast Corporation 6,200 313,488
The Walt Disney Company 11,500 336,375
Time Warner, Inc. 9,000 650,813

CHEMICAL - 0.8%
duPont, E.I. de Nemours & Co. 6,400 421,600

COMPUTER & PERIPHERALS - 15.1%
Apple Computer, Inc.* 1,500 154,219
Cisco Systems, Inc.* 26,300 2,817,387
Compaq Computer Corporation 9,400 254,387
Dell Computer Corporation* 21,100 1,076,100
EMC Corporation* 6,300 688,275
Hewlett-Packard Company 5,700 648,375
International Business Machines Corp. 11,400 1,229,775
Sun Microsystems, Inc.* 11,800 913,763
VERITAS Software Corporation* 850 121,656

COMPUTER SOFTWARE & SERVICES - 13.5%
America Online, Inc.* 14,800 1,122,950
At Home Corporation* 2,800 120,050
CMGI, Inc.* 1,300 359,938
Compuware Corporation* 2,400 89,400
Microsoft Corporation* 41,400 4,833,450
Oracle Corporation* 3,800 425,838
Siebel Systems, Inc.* 1,200 100,800

DIVERSIFIED - 0.4%
Tyco International, Ltd. 5,200 202,800

DRUG - 10.0%
Abbott Laboratories 8,400 305,025
American Home Products Corp. 14,600 573,050
Bristol-Myers Squibb Company 16,200 1,039,837
Eli Lilly & Company 7,400 492,100
Merck & Company, Inc. 15,500 1,041,406
Pfizer, Inc. 29,500 956,906
Schering-Plough Corporation 9,900 419,513
Warner-Lambert Company 5,700 467,044

ELECTRICAL EQUIPMENT - 5.5%
General Electric Company 18,700 2,893,825

FINANCIAL SERVICES - 3.9%
Citigroup, Inc. 21,550 1,200,066
Fannie Mae 6,100 380,869
Morgan Stanley Dean Witter & Co. 3,200 456,800

FOREIGN TELECOMMUNICATIONS - 1.7%
Ericsson (LM) Telephone-ADR-Class B 13,400 880,212

INSURANCE - 2.0%
American International Group, Inc. 9,825 1,062,328

MEDICAL SUPPLIES - 2.2%
Johnson & Johnson 10,200 951,150
Medtronic, Inc. 6,200 225,913

</TABLE>

See Notes To Financial Statements

<PAGE>

ADVANCE CAPITAL I, INC. - CORNERSTONE STOCK FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
- ---------------------------------------------------------
<TABLE>
<CAPTION>

COMMON STOCK AND MARKET
REPURCHASE AGREEMENT SHARES VALUE
- ----------------------------------------- ----------- ----------------
<S> <C> <C>
PETROLEUM - 5.7%
BP Amoco PLC-ADR 1,588 $ 94,188
Exxon Mobil Corporation 24,372 1,963,469
Royal Dutch Petroleum Company 14,900 902,381

RESTAURANT - 0.7%
McDonald's Corporation 9,600 387,000

RETAIL STORE - 5.9%
Home Depot, Inc. 15,000 1,031,250
Wal-Mart Stores, Inc. 29,500 2,039,188

SECURITIES BROKERAGE - 0.3%
Charles Schwab Corporation 4,600 175,950

SEMICONDUCTOR - 7.8%
Applied Materials, Inc.* 1,450 183,697
Intel Corporation 28,000 2,304,750
Linear Technology Corporation 2,100 150,281
Maxim Integrated Products, Inc.* 4,000 188,750
Motorola, Inc. 4,600 677,350
Texas Instruments, Inc. 6,000 579,750

TELECOMMUNICATIONS EQUIPMENT - 3.9%
JDS Uniphase Corporation* 1,200 193,575
Lucent Technologies, Inc. 21,200 1,590,000
Tellabs, Inc.* 4,100 263,169

TELECOMMUNICATIONS SERVICE - 9.4%
AT&T Corporation 19,912 1,011,778
Bell Atlantic Corporation 10,100 621,781
BellSouth Corporation 12,500 585,156
Global Crossing Ltd.* 2,800 140,000
GTE Corporation 5,600 395,150
MCI WorldCom, Inc.* 15,900 843,694
Qwest Communications International, Inc.* 6,600 283,800
SBC Communications, Inc. 20,822 1,015,073

TOILETRIES / COSMETICS - 1.7%
Proctor & Gamble Company 7,900 865,544
----------------
TOTAL COMMON STOCK - 99.3%
(Cost $43,730,037) 52,007,018

REPURCHASE AGREEMENT - 2.5%
Fifth Third Bank 2 Party Repurchase
Agreement, 1.55%, 01/03/00 1,319,664
---------------
TOTAL INVESTMENTS IN SECURITIES - 101.8%
(Cost $45,049,701) $ 53,326,682
================
</TABLE>

* Securities are non-income producing

See Notes To Financial Statements

<PAGE>

ADVANCE CAPITAL I, INC.
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1999
- ---------------------------------------------------
<TABLE>
<CAPTION>

EQUITY RETIREMENT CORNERSTONE
GROWTH BOND BALANCED INCOME STOCK
-------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments in securities . . . . . . . . $ 114,850,941 $ 33,539,124 $ 167,743,997 $ 205,533,002 $ 53,326,682

Cash 204,311 64,489 146,571 48,024 212,079
Receivables . . . . . . . . . . . . . .
Dividends and interest . . . . . . . . . 24,156 781,559 1,495,648 4,347,254 22,126
Securities sold . . . . . . . . . . . . 256,719 0 93,327 0 0
Prepaid expenses . . . . . . . . . . . . 6,433 2,425 10,758 1,313 1,076
-------------- ------------- ------------- ------------- -------------
Total assets . . . . . . . . . . . . . . 115,342,560 34,387,597 169,490,301 209,929,593 53,561,963

LIABILITIES
Payable to affiliated entities . . . . . .
Investment advisory fees . . . . . . . . 61,195 10,814 96,185 87,967 16,387
Distribution fees . . . . . . . . . . . 1,540 468 2,278 2,813 710
Accounts payable and accrued expenses. . . 15,646 11,045 30,007 31,932 13,494
Securities purchased . . . . . . . . . . 749,279 0 143,448 0 1,175,763
Distributions payable . . . . . . . . . . 0 3,534 2,326 15,989 97
-------------- ------------- ------------- ------------- -------------
Total liabilities . . . . . . . . . . . . 827,660 25,861 274,244 138,701 1,206,451
-------------- ------------- ------------- ------------- -------------
Net assets . . . . . . . . . . . . . . . $ 114,514,900 $ 34,361,736 $ 169,216,057 $ 209,790,892 $ 52,355,512
============= ============= ============= ============= =============

NET ASSETS
Paid-in capital . . . . . . . . . . . . $ 61,508,419 $ 35,309,913 $ 132,055,751 $ 219,935,543 $ 44,129,119
Accumulated undistributed net realized
gain (loss) on investments . . . . . . . 18,255 (59,239) 1,979 (1,024,760) (50,588)
Net unrealized appreciation (depreciation)
in value of investments . . . . . . . . 52,988,226 (888,938) 37,158,327 (9,119,891) 8,276,981
-------------- ------------- ------------- ------------- -------------
Net assets . . . . . . . . . . . . . . . $ 114,514,900 $ 34,361,736 $ 169,216,057 $ 209,790,892 $ 52,355,512
============= ============= ============= ============== ============

SHARES OUTSTANDING . . . . . . . . . . . . 4,332,261 3,587,559 9,940,102 21,826,738 3,863,940
============= ============== ============ =============== ===========
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER SHARE . . . . . . . $ 26.43 $ 9.58 $ 17.02 $ 9.61 $ 13.55
============= ============== ============= ============== ===========

</TABLE>

See Notes To Financial Statements

<PAGE>

ADVANCE CAPITAL I, INC.
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1999
- --------------------------------------------------
<TABLE>
<CAPTION>
RETIREMENT CORNERSTONE
EQUITY BOND BALANCED INCOME STOCK
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Interest . . . . . . . . . . . . . . . $ 29,375 $ 983,475 $ 4,413,757 $ 17,193,925 $ 15,844
Dividends . . . . . . . . . . . . . . . 280,812 0 1,311,770 0 224,712
------------- ------------- ------------- ------------- -------------
Total investment income . . . . . . . . 310,187 983,475 5,725,527 17,193,925 240,556

EXPENSES
Paid to affiliates:
Investment advisory fees . . . . . . . 555,760 51,730 1,000,853 1,091,252 108,733
Distribution fees . . . . . . . . . . 198,486 24,270 357,447 545,626 67,958
Paid to others:
Custodial fees . . . . . . . . . . . 23,269 6,077 39,201 12,703 9,443
Directors fees and expenses . . . . . . 2,662 327 4,842 7,439 841
Professional fees . . . . . . . . . . 9,053 1,406 16,683 26,280 2,284
Shareholder reporting costs . . . . . . 16,659 2,371 30,422 52,113 4,886
Registration and filing fees. . . . . . 4,656 9,771 10,136 4,763 12,135
Other operating expenses . . . . . . . 5,747 978 13,212 36,428 3,636
------------- ------------- ------------- ------------- -------------
Total expenses . . . . . . . . . . . . 816,292 96,930 1,472,796 1,776,604 209,916
------------- ------------- ------------- ------------- -------------
NET INVESTMENT INCOME (LOSS) (506,105) 886,545 4,252,731 15,417,321 30,640

REALIZED GAIN (LOSS) ON INVESTMENTS
Proceeds from securities sold . . . . . . 29,003,447 4,141,671 33,491,315 38,107,065 2,040,489
Cost of securities sold . . . . . . . . (15,518,562) (4,200,910) (24,337,911) (39,131,825) (2,091,077)
------------- ------------- ------------- ------------- -------------
Net realized gain (loss) on investment. . 13,484,885 (59,239) 9,153,404 (1,024,760) (50,588)

UNREALIZED GAIN (LOSS) ON INVESTMENTS
Appreciation, Beginning of year . . . . . 29,216,865 248,942 38,527,225 10,432,619 233,274
Appreciation (Depreciation), End of year. 52,988,226 (888,938) 37,158,327 (9,119,891) 8,276,981
------------- ------------- ------------- ------------- -------------
Net unrealized gain (loss) on investment. 23,771,361 (1,137,880) (1,368,898) (19,552,510) 8,043,707
------------- ------------- ------------- ------------- -------------
NET GAIN (LOSS) ON INVESTMENTS. . . . . . . 37,256,246 (1,197,119) 7,784,506 (20,577,270) 7,993,119
------------- ------------- ------------- ------------- -------------
NET INCREASE (DECREASE) IN
NET ASSETS RESULTING
FROM OPERATIONS . . . . . . . . . . . $ 36,750,141 $ (310,574)$ 12,037,237 $ (5,159,949)$ 8,023,759
============= ============= ============= ============= =============

</TABLE>

See Notes To Financial Statements

<PAGE>

ADVANCE CAPITAL I, INC.
STATEMENT OF CHANGES IN NET ASSETS
YEARS ENDED DECEMBER 31, 1999 AND 1998
- -------------------------------------------------------
<TABLE>
<CAPTION>

EQUITY GROWTH BOND
------------------------------ -----------------------------
1999 1998 1999 1998
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) . . . . . . . . . . . . $ (506,105) $ (344,938) $ 886,545 $ 252,618
Net realized gain (loss) on investments . . . . . . . 13,484,885 (299,574) (59,239) 18,492
Net unrealized gain (loss) on investment. . . . . . . 23,771,361 10,064,361 (1,137,880) 33,482
-------------- -------------- -------------- --------------
Net increase (decrease) in net assets resulting
from operations . . . . . . . . . . . . . . . . . 36,750,141 9,419,849 (310,574) 304,592

Distributions to Shareholders:
Net investment income . . . . . . . . . . . . . . . 0 0 (886,545) (252,618)
Net realized gain on investments . . . . . . . . . . (13,167,056) 0 0 (18,492)
-------------- -------------- -------------- --------------
Total distributions to shareholders . . . . . . . . . (13,167,056) 0 (886,545) (271,110)

Share Transactions:
Net proceeds from sale of shares . . . . . . . . . . 17,779,839 10,851,525 32,473,007 184,096
Reinvestment of distributions . . . . . . . . . . . . 13,088,272 0 846,157 225,055
Cost of shares reacquired . . . . . . . . . . . . . (7,997,052) (6,542,846) (1,506,491) (899,446)
-------------- -------------- -------------- --------------
Net increase (decrease) derived from share transacti. 22,871,059 4,308,679 31,812,673 (490,295)
-------------- -------------- -------------- --------------
Net increase (decrease) in net assets . . . . . . . . 46,454,144 13,728,528 30,615,554 (456,813)

NET ASSETS
Beginning of year . . . . . . . . . . . . . . . . . 68,060,756 54,332,228 3,746,182 4,202,995
-------------- -------------- -------------- --------------
End of year . . . . . . . . . . . . . . . . . . . $ 114,514,900 $ 68,060,756 $ 34,361,736 $ 3,746,182
============== ============== ============== ==============
NUMBER OF SHARES
Sold . . . . . . . . . . . . . . . . . . . . . 778,469 605,020 3,299,723 17,285
Shares issued from reinvestment of distributions. . . 520,408 0 86,399 21,229
Reacquired . . . . . . . . . . . . . . . . . . . . (361,372) (360,707) (151,307) (85,145)
-------------- -------------- -------------- --------------
Net increase (decrease) in shares outstandin. . . . . 937,505 244,313 3,234,815 (46,631)

Outstanding:
Beginning of year . . . . . . . . . . . . . . . . 3,394,756 3,150,443 352,744 399,375
-------------- -------------- -------------- --------------
End of year . . . . . . . . . . . . . . . . . . . 4,332,261 3,394,756 3,587,559 352,744
============== ============== ============== ==============

</TABLE>

See Notes To Financial Statements

<PAGE>

ADVANCE CAPITAL I, INC.
STATEMENT OF CHANGES IN NET ASSETS - Continued
YEARS ENDED DECEMBER 31, 1999 AND 1998
- ----------------------------------------------------------
<TABLE>
<CAPTION>
RETIREMENT
BALANCED INCOME
------------------------------------------------------------
1999 1998 1999 1998
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income . . . . . . . . . . . . . . . $ 4,252,731 $ 3,296,711 $ 15,417,321 $ 14,506,674
Net realized gain (loss) on investments . . . . . . . 9,153,404 840,615 (1,024,760) 325,461
Net unrealized gain (loss) on investment. . . . . . . (1,368,898) 9,951,142 (19,552,510) (1,938,841)
------------- ------------- ------------- -------------
Net increase (decrease) in net assets resulting
from operations . . . . . . . . . . . . . . . . . 12,037,237 14,088,468 (5,159,949) 12,893,294

Distributions to Shareholders:
Net investment income . . . . . . . . . . . . . . . (4,252,731) (3,296,711) (15,417,321) (14,506,674)
Net realized gain on investments . . . . . . . . . . (9,151,425) (840,615) 0 (284,242)
------------- ------------- ------------- -------------
Total distributions to shareholders . . . . . . . . . (13,404,156) (4,137,326) (15,417,321) (14,790,916)

Share Transactions:
Net proceeds from sale of shares . . . . . . . . . . 48,211,699 25,495,015 18,057,451 29,094,377
Reinvestment of distributions . . . . . . . . . . . . 13,332,203 4,102,654 15,215,852 14,595,861
Cost of shares reacquired . . . . . . . . . . . . . (16,843,598) (13,087,598) (24,126,037) (21,082,826)
------------- ------------- ------------- -------------
Net increase derived from share transactions. . . . . 44,700,304 16,510,071 9,147,266 22,607,412
------------- ------------- ------------- -------------
Net increase (decrease) in net assets . . . . . . . . 43,333,385 26,461,213 (11,430,004) 20,709,790

NET ASSETS
Beginning of year . . . . . . . . . . . . . . . . . 125,882,672 99,421,459 221,220,896 200,511,106
------------- ------------- ------------- -------------
End of year . . . . . . . . . . . . . . . . . . . $ 169,216,057 $ 125,882,672 $ 209,790,892 $ 221,220,896
============== ============== ============== ==============
NUMBER OF SHARES
Sold . . . . . . . . . . . . . . . . . . . . . 2,778,565 1,559,384 1,760,916 2,736,189
Shares issued from reinvestment of distributions. . . 789,121 248,724 1,516,528 1,372,921
Reacquired . . . . . . . . . . . . . . . . . . . . (974,501) (797,921) (2,398,897) (1,985,302)
-------------- -------------- -------------- --------------
Net increase in shares outstanding. . . . . . . . . . 2,593,185 1,010,187 878,547 2,123,808

Outstanding:
Beginning of year . . . . . . . . . . . . . . . . 7,346,917 6,336,730 20,948,191 18,824,383
-------------- -------------- -------------- --------------
End of year . . . . . . . . . . . . . . . . . . 9,940,102 7,346,917 21,826,738 20,948,191
============================== =============================
</TABLE>

See Notes To Financial Statements

<PAGE>

ADVANCE CAPITAL I, INC.
STATEMENT OF CHANGES IN NET ASSETS - Continued
- -------------------------------------------------------
<TABLE>
<CAPTION>
CORNERSTONE
STOCK
-----------------------------
Year Partial Year
Ended Ended *
Dec. 31, 1999 Dec. 31, 1998
------------- -------------
<S> <C> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income . . . . . . . . . . . . . . . . $ 30,640 $ 2,901
Net realized gain (loss) on investments . . . . . . . . (50,588) 0
Net unrealized gain on investments . . . . . . . . . . 8,043,707 233,274
------------- -------------

Net increase in net assets resulting
from operations . . . . . . . . . . . . . . . . . 8,023,759 236,175

Distributions to Shareholders:
Net investment income . . . . . . . . . . . . . . . (30,640) (2,901)
Net realized gain on investments . . . . . . . . . . . 0 0
------------- -------------
Total distributions to shareholders . . . . . . . . . . (30,640) (2,901)

Share Transactions:
Net proceeds from sale of shares . . . . . . . . . . . 38,198,551 7,080,114
Reinvestment of distributions . . . . . . . . . . . . 30,541 2,901
Cost of shares reacquired . . . . . . . . . . . . . . (1,182,988) 0
------------- -------------
Net increase derived from share transactions. . . . . . 37,046,104 7,083,015
------------- -------------
Net increase in net assets . . . . . . . . . . . . . . 45,039,223 7,316,289

NET ASSETS
Beginning of period . . . . . . . . . . . . . . . . 7,316,289 0
------------- -------------
End of period . . . . . . . . . . . . . . . . . . . $ 52,355,512 $ 7,316,289
============== ==============
NUMBER OF SHARES
Sold . . . . . . . . . . . . . . . . . . . . . . 3,258,482 699,003
Shares issued from reinvestment of distributions. . . . 2,254 277
Reacquired . . . . . . . . . . . . . . . . . . . . . (96,076) 0
------------- -------------
Net increase in shares outstanding. . . . . . . . . . . 3,164,660 699,280

Outstanding:
Beginning of period . . . . . . . . . . . . . . . . 699,280 0
------------- -------------
End of period . . . . . . . . . . . . . . . . . . . 3,863,940 699,280
============= ==============
</TABLE>

* From December 17, 1998 (commencement of operations) to December 31, 1998.

See Notes To Financial Statements

<PAGE>

NOTES TO FINANCIAL STATEMENTS

NOTE 1. ORGANIZATION OF THE COMPANY

Advance Capital I, Inc. (the COMPANY) is a Maryland
Corporation organized on March 6, 1987 and commenced operations
on August 5, 1987. The COMPANY is registered under the
Investment Company Act of 1940, as amended, as an open-end,
diversified management investment company (a mutual fund)
offering shares in the following portfolios: Equity Growth Fund,
Bond Fund, Balanced Fund, Retirement Income Fund and Cornerstone
Stock Fund.

NOTE 2. ACCOUNTING POLICIES

The preparation of financial statements in accordance
with generally accepted accounting principles requires management
to make estimates and assumptions that affect reported amounts and
disclosures in the financial statements. Actual results could
differ from these estimates.

The following is a summary of significant accounting policies
followed by the COMPANY.

SECURITY VALUATION

Securities for which exchange quotations are readily
available are valued at the last sale price at the close of business.
If there is no sale price, they are valued at the last bid price.
Securities (including restricted securities) for which exchange
quotations are not readily available (and in certain cases debt
securities which trade on an exchange), are valued primarily using
dealer supplied valuations or at their fair value as determined in
good faith under consistently applied procedures under the general
supervision of the Board of Directors. Money market instruments
held by the Funds with a remaining maturity of sixty days or less
are valued at cost which approximates market.

REPURCHASE AGREEMENTS

The Fund may engage in repurchase agreement transactions.
When a fund engages in such transactions, it is policy to require
the custodian bank to take possession of all securities held as
collateral in support of repurchase agreement investments. In
addition, the Fund monitors the market value of the underlying
collateral on a daily basis. If the seller defaults or if bankruptcy
proceedings are initiated with respect to the seller, the realization
or retention of the collateral may be subject to legal proceedings.

55
<PAGE>

NOTE 2. ACCOUNTING POLICIES (CONTINUED)

EXPENSES

Most expenses of the COMPANY can be directly attributed to a fund.
Expenses which cannot be directly attributed are generally apportioned
between the Funds on the basis of average net assets.

FEDERAL INCOME TAXES

It is each fund's policy to meet the requirements of the Internal
Revenue Code that are applicable to regulated investment companies and each
fund intends to distribute all of its taxable income to its shareholders.
Therefore, no federal income tax provision is provided.

DIVIDENDS

Income dividends in the Bond, Balanced and Retirement Income Funds
are declared daily, except on Saturdays, Sundays and holidays and are paid
monthly on the last business day of the month. Income dividends in the Equity
Growth and Cornerstone Stock Funds, if any, are declared annually and paid on
the last business day of the year. Capital gain distributions, if any, are
declared annually and paid in December. For 1999, distributions of net
realized capital gains of $13,167,056 and $9,151,425 were paid by the
Equity Growth and Balanced Funds, respectively.

OTHER

Security transactions are accounted for on the trade date, the date
the order to buy or sell is executed. Interest income is recorded on the
accrual basis. Dividend income is recorded on the ex-dividend date. Premium
and discount on fixed income securities are amortized using the effective
interest method. Realized gains and losses on security transactions are
determined on the specific identification method for book and tax purposes.
Net investment losses, for which no carryover is permitted, are offset against
paid in capital.

NOTE 3. TRANSACTIONS WITH AFFILIATES

Advance Capital Management, Inc. (MANAGEMENT) (a wholly owned
subsidiary of Advance Capital Group, Inc.) is the COMPANY'S investment
adviser. T. Rowe Price Associates, Inc. (TRPA) serves as sub-adviser
for that portion of the portfolio of assets of the Equity Growth Fund
and Balanced Fund which are determined by MANAGEMENT to be invested in
common stocks. Advance Capital Services, Inc. (SERVICES) (also a wholly
owned subsidiary of Advance

<PAGE>

NOTE 3. TRANSACTIONS WITH AFFILIATES (CONTINUED)

Capital Group, Inc.) is the distributor of the Company's shares.
Advance Capital Group, Inc. (GROUP) is the Company's Administrator,
Transfer Agent and Dividend Disbursing Agent. For services provided
by MANAGEMENT, the COMPANY pays a fee equal on an annual basis to .70%
of the average daily net assets of the Equity Growth and Balanced Funds,
.50% of the average daily net assets of the Retirement Income Fund, and
.40% of the average daily net assets of the Bond and Cornerstone Stock Funds.
For its services, TRPA is paid a fee by MANAGEMENT equal on an annual
basis to .20% of the average daily net assets of the Equity Growth Fund
and that portion of the Balanced Fund invested in common stocks for the
first $100 million of assets managed and .15% of the average daily net
assets exceeding $100 million. GROUP provides administrative, transfer
agent and dividend disbursing agent services to the COMPANY. The COMPANY
will reimburse SERVICES for actual expenses incurred in connection with
the distribution of fund shares of the Equity Growth, Bond, Balanced,
Retirement Income and Cornerstone Stock Funds, at a rate not to exceed
.25% of each fund's average daily net assets.

The COMPANY was charged investment advisory fees of $2,808,328
by MANAGEMENT for 1999. The COMPANY was charged distribution
fees of $1,193,787 by SERVICES for 1999. At December 31, 1999
an employee retirement plan sponsored by SERVICES owned 76,990
shares (1.8%) of the Equity Growth Fund and 8,020 shares (0.2%) of the
Cornerstone Stock Fund.

Certain officers and directors of GROUP, MANAGEMENT, and SERVICES,
are also officers and directors of the COMPANY. Directors fees are only
paid to outside directors and consist of a $2,500 annual retainer plus $250
per meeting attended.

NOTE 4. INVESTMENT PORTFOLIO TRANSACTIONS

The cost of purchases and proceeds from sales of investments,
other than short-term obligations, for 1999 were as follows:

Equity Retirement Cornerstone
Growth Bond Balanced Income Stock
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Purchases $37,957,320 $35,090,694 $68,400,558 $49,360,124 $38,764,307
Sales 29,003,447 4,141,671 33,491,315 38,107,065 2,040,489

</TABLE>

<PAGE>

NOTE 4. INVESTMENT PORTFOLIO TRANSACTIONS (CONTINUED)

The cost of purchases and proceeds from sales of U.S. Government
securities included above were as follows:

<TABLE>
<CAPTION>
Equity Retirement Cornerstone
Growth Bond Balanced Income Stock
------ ---------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Purchases None $2,127,116 $1,119,375 None None
Sales None 1,030,806 543,672 None None

</TABLE>

Gross unrealized appreciation and depreciation of investments for book
and tax purposes as of December 31, 1999 were as follows:

<TABLE>
<CAPTION>
Equity Retirement Cornerstone
Growth Bond Balanced Income Stock
----------- ------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Appreciation $55,826,925 $ 56,996 $43,923,777 $ 2,282,670 $9,638,512
Depreciation 2,838,699 945,934 6,765,450 11,402,561 1,361,531

</TABLE>

NOTE 5. CAPITAL LOSS CARRYOVERS

For 1999, the Company utilized $299,574 of capital loss carryovers
in the Equity Growth Fund. At December 31, 1999, capital loss carryovers and
their expiration dates were as follows:

<TABLE>
Retirement Cornerstone
Bond Income Stock
------- ---------- -----------
<S> <C> <C> <C>
December 31, 2007 $59,239 $1,024,760 $50,588

</TABLE>

NOTE 6. AUTHORIZED SHARES

The Fund has one billion authorized shares of common stock, par value
of $.001 per share. Each of the Fund's five portfolios has 200 million shares
authorized.

<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

To the Trustees and Shareholders of
Advance Capital I, Inc.

In our opinion, the accompanying statements of assets and liabilities,
including the portfolios of investments, and the related statements of
operations and of changes in net assets and the financial highlights
present fairly, in all material respects, the financial position of the
Equity Growth Fund, Bond Fund, Balanced Fund, Retirement Income Fund and
Cornerstone Stock Fund (constituting Advance Capital I, Inc., hereafter
referred to as the "Company") at December 31, 1999, the results of each
of their operations for the year then ended, the changes in each of their
net assets and the financial highlights for the periods indicated in
conformity with accounting principles generally accepted in the United
States. These financial statements and financial highlights (hereafter
referred to as "financial statements") are the responsibility of the
Company's management; our responsibility is to express an opinion on
these financial statements based on our audits. We conducted our audits
of these financial statements in accordance with auditing standards generally
accepted in the United States, which require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement
presentation. We believe that our audits, which included confirmation of
securities at December 31, 1999 by correspondence with the custodian and
brokers, provide a reasonable basis for the opinion expressed above.

/s/ PricewaterhouseCoopers LLP

Chicago, Illinois
February 7, 2000

<PAGE>

ADDITIONAL INFORMATION (UNAUDITED)

RESULTS OF ANNUAL SHAREHOLDER VOTE

An Annual Meeting of Shareholders of the COMPANY was held at the Novi
Hilton, 21111 Haggerty Road, Novi, Michigan, on July 23, 1999 for the following
purposes:

1. To elect five Directors to hold office until the next Annual
Meeting of Shareholders or until their successors have been
elected and qualified.

Directors Elected at Meeting Votes For
---------------------------- ---------
<S> <C>
Joseph A. Ahern 22,435,557
Richard W. Holtcamp 22,312,798
Harry Kalajian 22,403,630
John C. Shoemaker 22,435,557
Frank R. Zimmerman 22,328,245

</TABLE>

2. To ratify the selection of PricewaterhouseCoopers LLP as
independent accountants of the COMPANY for the fiscal year
ending December 31, 1999.

<TABLE>
<CAPTION>
<S> <C>
Votes For: 22,324,035
Votes Against: 29,313
Votes to Abstain: 170,175

</TABLE>

<PAGE>
ADVANCE CAPITAL I, INC. ADVANCE CAPITAL I INC
An investment company with five funds
INVESTMENT ADVISER:
Advance Capital Management, Inc.
One Towne Square, Suite 444
Southfield, Michigan 48076

SUB-ADVISER:
(Equity Growth and Balanced Funds) EQUITY GROWTH FUND
T. Rowe Price Associates, Inc. BOND FUND
100 East Pratt Street BALANCED FUND
Baltimore, Maryland 21202 RETIREMENT INCOME FUND
CORNERSTONE STOCK FUND
DISTRIBUTOR:
Advance Capital Services, Inc.
P.O. Box 3144
Southfield, Michigan 48037

ADMINISTRATOR AND TRANSFER AGENT:
Advance Capital Group, Inc.
P.O. Box 3144
Southfield, Michigan 48037

CUSTODIAN:
Fifth Third Bank
38 Fountain Square Plaza
Cincinnati, Ohio 45263

INDEPENDENT ACCOUNTANTS:
PricewaterhouseCoopers LLP
203 North LaSalle Street
Chicago, IL 60601

OFFICERS:
John C. Shoemaker, President
Robert J. Cappelli, Vice President & Treasurer
Charles J. Cobb, Vice President
Kathy J. Harkleroad, Secretary ANNUAL REPORT
DECEMBER 31, 1999
BOARD OF DIRECTORS:
Joseph A. Ahern
Richard W. Holtcamp
Harry Kalajian
Thomas L. Saeli
John C. Shoemaker
Frank R. Zimmerman

<PAGE>

FORM N-1A

Part C - Other Information

Item 23. Exhibits.

(a) We are incorporating the Articles of Incorporation,
filing date 3/6/87,file #'s 033-13754, 811-05127,
by reference.

(i) Amendment to Articles of Incorporation
approved by shareholder vote July 24, 1992.

(b) We are incorporating the By-laws as approved and
adopted by Registrant's Board of Directors, filing
date 3/6/87, file #'s 033-13754, 811-05127, by
reference.

(d) We are incorporating the Investment Advisory
Agreement between Registrant and Advance Capital
Management, Inc. dated August 3, 1987, amended
July 24, 1992 and further amended July 24, 1998,
filing date 8/14/98, file #'s 033-13754, 811-05127,
by reference.

(i) Board Resolution dated July 24, 1992.

(ii) Sub-Investment Advisory Agreements between
Advance Capital Management, Inc. and T. Rowe
Price Associates, Inc. dated December 21, 1993
for Class A and December 17, 1993 for Class C.

(e) We are incorporating the Distribution Agreement between
Registrant and Advance Capital Services, Inc. dated
August 3, 1987 and amended July 24, 1998, filing date
8/14/98, file #'s 033-13754, 811-05127, by reference.

(i) Board Resolution dated July 24, 1992

(f) None

* (g) Custodian Agreement between Registrant and Fifth
Third Bank

(h) None

(i) Opinion and consent of counsel (Not Required)

(j) Other consents.

* (i) Consent of PricewaterhouseCoopers LLP.

(k) None

(l) None

(m) We are incorporating the Plan of Distribution dated
August 3, 1987, approved by shareholders July 22, 1988
and amended January 2, 1992 and further amended
July 24, 1998, filing date 8/14/98, file #'s 033-13754,
811-05127, by reference.

(i) Board Resolution Dated April 24, 1992.

(ii) Board Resolution Dated July 24, 1992.

(n) None

(o) None

* (p) Code of ethics

* Filed with this amendment.

Item 24. Persons Controlled By or Under Common Control with Registrant.
--------------------------------------------------------------

Included in Part B - Statement of Additional Information under
the heading of Control Persons and Principal Holders of Securities
is a detailed description of the principal holders of securities,
including those that own more than 5% and the detailed holdings of
directors and officers of the Company.

The holdings as of March 31, 2000 for Messrs. Raymond Rathka,
John C. Shoemaker and Robert J. Cappelli, who are directors and
officers of the Registrant's Investment Adviser, Advance Capital
Management, Inc. and of the Registrant's transfer agent and
administrator, Advance Capital Services, Inc., are included in
that section of Part B mentioned in the preceding paragraph.

Item 25. Indemnification
---------------

Article VII, Section 3 of Registrant's Articles of
Incorporation, incorporated by reference as Item 23, Exhibit (a)
hereto, and Article VI, Section 2 of Registrant's Bylaws,
incorporated by reference as Exhibit (b) hereto, provides for
the indemnification of Registrant's directors and officers.
Indemnification of the Registrant's principal underwriter is
provided for in Section 4 of the Distribution Agreement,
incorporated by reference as Exhibit (e) hereto. In no event
will Registrant indemnify any of its directors, officers,
employees, or agents against any liability to which said person
would otherwise be subject by reason of his willful misfeasance,
bad faith, or gross negligence in the performance of his duties,
or by reason of his reckless disregard of the duties involved in
the conduct of his office or under his agreement with Registrant.
Registrant will comply with Rule 484 under the Securities Act
of 1933 and Release No. 11330 under the Investment Company Act
of 1940 in connection with any indemnification.

Insofar as indemnification for liability arising under
the Securities Act of 1933 may be permitted to directors, officers,
and controlling persons of Registrant pursuant to the foregoing
provisions, or otherwise, Registrant has been advised that in the
opinion of the Securities and Exchange Commission such
indemnifications against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment
by Registrant of expenses incurred or paid by a director, officer,
or controlling person of Registrant in the successful defense of
any action, suit, or proceeding) is asserted by such director,
officer, or controlling person in connection with the securities
being registered, Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication
of such issue.

Item 26. Business and Other Connections of the Investment Advisor
--------------------------------------------------------

Advance Capital Management, Inc. ("Management") is a Michigan
corporation established in 1986 for the purpose of providing
investment management services. Management, a registered investment
adviser with the Securities and Exchange Commission and the State
of Michigan, is a wholly owned subsidiary of Advance Capital
Group, Inc.("Group"). Group also owns Advance Capital Services, Inc.
("Services") a financial services company that is a licensed
National Association of Securities Dealers, Inc. broker-dealer.
The owners of Group and the directors and officers of Services and
Management are the same three individuals, Raymond A. Rathka,
John C. Shoemaker, and Robert J. Cappelli. The address for all
three companies is One Towne Square, Suite 444, Southfield,
Michigan, 48076. The chart below shows the ownership and control
of these three firms and of the Registrant as well.

Position Group Services Management Registrant
- -------- --------- --------- ---------- ------------
<S> <C> <C> <C> <C>
Owner(s) Cappelli Group Group Shareholders
Rathka
Shoemaker

Directors Cappelli Cappelli Cappelli Ahern, J.A.
Rathka Rathka Rathka Holtcamp, R.W.
Shoemaker Shoemaker Kalajian, H.
Saeli, T.L.
Shoemaker,J.C.
Zimmerman, F.R.

President Rathka Cappelli Shoemaker Shoemaker

Vice President Shoemaker Shoemaker Cappelli Cappelli
Cobb

Treasurer Cappelli Rathka Rathka Cappelli

Secretary Shoemaker Shoemaker Shoemaker Harkleroad
</TABLE>

Item 27. Principal Underwriters.
-----------------------

Advance Capital Services, Inc.("Services") is a Michigan
corporation which was established in 1986 to provide financial
services and broker-dealer services. Currently, it is not
distributing securities for any other investment companies.
The directors and officers of Services are identified in Item 26
above.

Item 28. Location of Accounts and Records
--------------------------------

(1) Advance Capital Management, Inc., One Towne Square,
Suite 444, Southfield, Michigan, 48076 (records relating
to its functions as investment adviser).

(2) Advance Capital Services, Inc., One Towne Square,
Suite 444, Southfield, Michigan 48076 (records relating
to its functions as distributor)

(3) Advance Capital Group, Inc., One Towne Square,
Suite 444, Southfield, Michigan 48076 (records relating
to its functions as administrator and transfer agent)

(4) Fifth Third Bank, 38 Fountain Square Plaza, Cincinnati,
Ohio 45263 (records relating to its functions as custodian).

(5) Butzel Long, 150 West Jefferson, Suite 900, Detroit,
Michigan 48226 (Registrant's Articles of Incorporation
and Bylaws).

Item 29. Management Services.
--------------------

Inapplicable.

Item 30. Undertakings.
-------------

None.

<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933
and the Investment Company Act of 1940, the Registrant certifies that
it meets all of the requirements for effectiveness of this Registration
Statement pursuant to Rule 485(b) under the Securities Act of 1933 and
has duly caused this Post-Effective Amendment No. 24 to its Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized.

ADVANCE CAPITAL I, INC.
Registrant

By /s/ Kathy J. Harkleroad 4/21/00
-------------------------------- ----
Kathy J. Harkleroad - Secretary Date

Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed below by the following
persons in the capacities and on the date indicated.

Principal Executive Officer:

/s/ John C. Shoemaker 4/21/00
- ------------------------------------------ ----
John C. Shoemaker - President and Director Date

Principal Financial Officer:

/s/ Robert J. Cappelli 4/25/00
- ------------------------------- ----
Robert J. Cappelli - Treasurer Date

Directors:

/s/ Joseph A. Ahern 4/20/00
- ------------------------- ----
Joseph A. Ahern Date

/s/ Richard W. Holtcamp 4/24/00
- ------------------------- ----
Richard W. Holtcamp Date

/s/ Harry Kalajian 4/21/00
- ------------------------- ----
Harry Kalajian Date

/s/ Thomas L. Saeli 4/21/00
- ------------------------- ----
Thomas L. Saeli Date

/s/ Frank R. Zimmerman 4/20/00
- ------------------------- ----
Frank R. Zimmerman Date

<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
----------------------------------

We hereby consent to the use in the Statement of Additional Information
constituting part of this Post-Effective Amendment No. 24 to the
registration statement on Form N-1A (the "Registration Statement")
of our report dated February 7, 2000, relating to the financial
statements and financial highlights of Advance Capital I, Inc., which
appears in such Statement of Additional Information, and to the
incorporation by reference of our report into the Prospectus which
constitutes part of this Registration Statement. We also consent to the
reference to us under the heading "Independent Accountants" in such
Statement of Additional Information and to the reference to us under the
heading "Financial Highlights" in such Prospectus.

/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Chicago, Illinois
April 28, 2000

<PAGE>
CUSTODY AGREEMENT

THIS AGREEMENT, is made as of August 11, 2000, by and
between Advance Capital I, Inc., a business trust organized under
the laws of the State of Maryland (the "Company"), and THE FIFTH
THIRD BANK, a banking trust organized under the laws of the State
of Ohio (the "Custodian").

WITNESSETH:

WHEREAS, the Trust desires that the Securities and
cash of each of the investment portfolios identified in Exhibit
A hereto (such investment portfolios and individually referred
to herein as a "Fund" and collectively as the "Funds"), be held
and administered by the Custodian pursuant to this Agreement; and

WHEREAS, the Trust is an open-end management investment
company registered under the Investment Company Act of 1940, as
amended (the "1940 Act"); and

WHEREAS, the Custodian represents that it is a bank
having the qualifications prescribed in Section 26(a)(i) of the
1940 Act;

NOW, THEREFORE, in consideration of the mutual agreements
herein made, the Trust and the Custodian hereby agree as follows:

ARTICLE I

DEFINITIONS

Whenever used in this Agreement, the following words and
phrases, unless the context otherwise requires, shall have the
following meanings:

1.1 "Authorized Person" means any Officer or other
person duly authorized by resolution of the Board of Trustees to
give Oral Instructions and Written Instructions on behalf of the
Trust and named in Exhibit B hereto or in such resolutions of the
Board of Trustees, certified by an Officer, as may be received
the Custodian from time to time.

1.2 "Board of Trustees" shall mean the Trustees from
time to time serving under the Trust's Agreement and Declaration
of Trust, dated March 6, 1987,as from time to time amended.

1.3 "Book-Entry System" shall mean a federal book-entry
system as provided in Subpart O of Treasury Circular No. 300,
31 CFR 306, in Subpart B of 31 CFR Part 350, or in such book-entry
regulations of federal agencies as are substantially in the form of
such Subpart O.

1.4 "Business Day" shall mean any day recognized as a
settlement day by The New York Stock Exchange, Inc. and any other
day for which the Fund computes the net asset value of the Fund.

1.5 "NASD" shall mean The National Association
Securities Dealers, Inc.

1.6 "Officer" shall mean the President, any
Vice President, the Secretary, any Assistant Secretary, the
Treasurer, or any Assistant Treasurer of the Trust.

1.7 "Oral Instructions" shall mean instructions orally
transmitted to and accepted by the Custodian because such instructions
are: (i) reasonably believed by the Custodian to have been given by
an Authorized Person, (ii) recorded and kept among the records of the
Custodian made in the ordinary course of business and (iii) orally
confirmed by the Custodian. The Trust shall cause all Oral
Instructions to be confirmed by Written Instructions. If such
Written Instructions confirming Oral Instructions are not received
by the Custodian prior to a transaction, it shall in no way affect
the validity of the transaction or the authorization thereof by
the Trust. If Oral Instructions vary from the Written Instructions
which purport to confirm them, the Custodian shall notify the of
such variance but such Oral Instructions will govern
unless the Custodian has not yet acted.

1.8 "Custody Account" shall mean any account in the name
of the Trust, which is provided for in Section 3.2 below.

1.9 "Proper Instructions" shall mean Oral Instructions or
Written Instructions. Proper Instructions may be continuing Written
Instructions when deemed appropriate by both parties.

1.10 "Securities Depository" shall mean The Participants
Trust Company or The Depository Trust Company and (provided that
Custodian shall have received a copy of a resolution of the Board of
Trustees, certified by an Officer, specifically approving the use of
such clearing agency as a depository for the Trust) any other clearing
agency registered with the Securities and Exchange Commission under
Section 17A of the Securities and Exchange Act of 1934 (the
"1934 Act"), which acts as a system for the central handling of
Securities where all Securities of any particular class or series of
an issuer deposited within the system are treated as fungible and may
be transferred or pledged by bookkeeping entry without physical
delivery of the Securities.

1.11 "Securities" shall include, without limitation, common
and preferred stocks, bonds, call options, put options, debentures,
notes, bank certificates of deposit, bankers' acceptances,
mortgage-backed securities, other money market instruments or other
obligations, and any certificates, receipts, warrants or other
instruments or documents representing rights to receive, purchase or
subscribe for the same, or evidencing or representing any other
rights or interests therein, or any similar property or assets that
the Custodian has the facilities to clear and to service.

1.12 "Shares" shall mean the units of beneficial interest
issued by the Trust.

1.13 "Written Instructions" shall mean (i) written
communications actually received by the Custodian and signed by one or
more persons as the Board of Trustees shall have from time to time
authorized, or (ii) communications by telex or any other such system
from a person or persons reasonably believed by the Custodian to be
Authorized, or (iii) communications transmitted electronically
through the Institutional Delivery System (IDS), or any other
similar electronic instruction system acceptable to Custodian
and approved by resolutions of the Board of Trustees, a copy of
which, certified by an Officer, shall have been delivered to the
Custodian.

ARTICLE II
APPOINTMENT OF CUSTODIAN

2.1 Appointment. The Trust hereby constitutes and
appoints the Custodian as custodian of all Securities and cash
owned by or in the possession of the Trust at any time during the
period of this Agreement, provided that such Securities or cash at
all times shall be and remain the property of the Trust.

2.2 Acceptance. The Custodian hereby accepts
appointment as such custodian and agrees to perform the duties
thereof as hereinafter set forth and in accordance with the 1940 Act
as amended. Except as specifically set forth herein, the Custodian
shall have no liability and assumes no responsibly for any
non-compliance by the Trust or a Fund of any laws, rules or
regulations.

ARTICLE III
CUSTODY OF CASH AND SECURITIES

3.1 Segregation. All Securities and non-cash property
held by the Custodian for the account of the Fund, except Securities
maintained in a Securities Depository or Book-Entry System, shall be
physically segregated from other Securities and non-cash property in
the possession of the Custodian and shall be identified as subject to
this Agreement.

3.2 Custody Account. The Custodian shall open and
maintain in its trust department a custody account in the name of
each Fund, subject only to draft or order of the Custodian, in which
the Custodian shall enter and carry all Securities, cash and other
assets of the Fund which are delivered to it.

3.3 Appointment of Agents. In its discretion, the
Custodian may appoint, and at any time remove, any domestic bank or
trust company, which has been approved by the Board of Trustees and
is qualified to act as a custodian under the 1940 Act, as
sub-custodian to hold Securities and cash of the Funds and to carry
out such other provisions of this Agreement as it may determine, and
may also open and maintain one or more banking accounts with such a
bank or trust company (any such accounts to be in the name of the
Custodian and subject only to its draft or order), provided, however,
that the appointment of any such agent shall not relieve the
Custodian of any of its obligations or liabilities under this
Agreement.

3.4 Delivery of Assets to Custodian. The Fund shall
deliver, or cause to be delivered, to the Custodian all of the Fund's
Securities, cash and other assets, including (a) all payments of
income, payments of principal and capital distributions received by
the Fund with respect to such Securities, cash or other assets owned
by the Fund at any time during the period of this Agreement, and (b)
all cash received by the Fund for the issuance, at any time during
such period, of Shares. The Custodian shall not be responsible for
such Securities, cash or other assets until actually received by it.

3.5 Securities Depositories and Book-Entry Systems. The
Custodian may deposit and/or maintain Securities of the Funds in a
Securities Depository or in a Book-Entry System, subject to the
following provisions:

(a) Prior to a deposit of Securities of the Funds in any
Securities Depository or Book-Entry System, the Fund shall deliver
to the Custodian a resolution of the Board of Trustees, certified by
an Officer, authorizing and instructing the Custodian on an on-going
basis to deposit in such Securities Depository or Book-Entry System
all Securities eligible for deposit therein and to make use of such
Securities Depository or Book-Entry System to the extent possible
and practical in connection with its performance hereunder, including,
without limitation, in connection with settlements of purchases and
sales of Securities, loans of Securities, and deliveries and returns
of collateral consisting of Securities.

(b) Securities of the Fund kept in a Book-Entry System or
Securities Depository shall be kept in an account ("Depository
Account") of the Custodian in such Book-Entry System or Securities
Depository which includes only assets held by the Custodian as a
fiduciary, custodian or otherwise for customers.

(c) The records of the Custodian and the Custodian's
account on the books of the Book-Entry System and Securities
Depository as the case may be, with respect to Securities of a Fund
maintained in a Book-Entry System or Securities Depository shall, by
book-entry, or otherwise identify such Securities as belonging to
the Fund.

(d) If Securities purchases by the Fund are to be held
in a Book-Entry System or Securities Depository, the Custodian shall
pay for such Securities upon (i) receipt of advice from the
Book-Entry System or Securities Depository that such Securities have
been transferred to the Depository Account, and (ii) the making of
an entry on the records of the Custodian to reflect such payment and
transfer for the account of the Fund. If Securities sold by the
Fund are held in a Book-Entry System or Securities Depository, the
Custodian shall transfer such Securities upon (i) receipt of advice
from the Book-Entry System or Securities depository that payment for
such Securities has been transferred to the Depository Account, and
(ii) the making of an entry on the records of the Custodian to
reflect such transfer and payment for the account of the Fund.

(e) Upon request, the Custodian shall provide the Fund
with copies of any report (obtained by the Custodian from a
Book-Entry System or Securities Depository in which Securities of
the Fund is kept) on the internal accounting controls and procedures
for safeguarding Securities deposited in such Book-Entry System or
Securities Depository.

(f) Anything to the contrary in this Agreement
notwithstanding, the Custodian shall be liable to the Trust for any
loss or damage to the Trust resulting (i) from the use of a
Book-Entry System or Securities Depository by reason of any
negligence or willful misconduct on the part of Custodian or any
sub-custodian appointed pursuant to Section 3.3 above or any of its
or their employees, or (ii) from failure of Custodian or any such
sub-custodian to enforce effectively such rights as it may have
against a Book-Entry System or Securities Depository. At its
election, the Trust shall be subrogated to the rights of the
Custodian with respect to any claim against a Book-Entry System or
Securities Depository or any other person for any loss or damage to
the Funds arising from the use of such Book-Entry System or
Securities Depository, if and to the extent that the Trust has been
made whole for any such loss or damage.

3.6 Disbursement of Moneys from Custody Accounts. Upon receipt of
Proper Instructions, the Custodian shall disburse moneys from a
Fund Custody Account but only in the following cases:

(a) For the purchase of Securities for the Fund but only
upon compliance with Section 4.1 of this Agreement and only (i) in
the case of Securities (other than options on Securities, futures
contracts and options on futures contracts), against the delivery
to the Custodian (or any sub-custodian appointed pursuant to Section
3.3 above) of such Securities registered as provided in Section 3.9
below in proper form for transfer, or if the purchase of such
Securities is effected through a Book-Entry System or Securities
Depository, in accordance with the conditions set forth in Section
3.5 above; (ii) in the case of options on Securities, against
delivery to the Custodian (or such sub-custodian) of such receipts as
are required by the customs prevailing among dealers in such options;
(iii) in the case of futures contracts and options on futures
contracts, against delivery to the Custodian (or such sub-custodian)
of evidence of title thereto in favor of the Trust or any nominee
referred to in Section 3.9 below; and (iv) in the case of repurchase
or reverse repurchase agreements entered into between the Trust and
a bank which is a member of the Federal Reserve System or between
the Trust and a primary dealer in U.S. Government securities,
against delivery of the purchased Securities either in certificate
form or through an entry crediting the Custodian's account at a
Book-Entry System or Securities Depository for the account of the
Fund with such Securities;

(b) In connection with the conversion, exchange or
surrender, as set forth in Section 3.7(f) below, of Securities
owned by the Fund;

(d) In payment of the redemption price of Shares as
provided in Section 5.1 below;

(e) For the payment of any expense or liability
incurred by the Trust, including but not limited to the following
payments for the account of a Fund: interest; taxes; administration,
investment management, investment advisory, accounting, auditing,
transfer agent, custodian, trustee and legal fees; and other
operating expenses of a Fund; in all cases, whether or not such
expenses are to be in whole or in part capitalized or treated as
deferred expenses;

(f) For transfer in accordance with the provisions of
any agreement among the Trust, the Custodian and a broker-dealer
registered under the 1934 Act and a member of the NASD, relating
to compliance with rules of The Options Clearing Corporation and
of any registered national securities exchange (or of any similar
organization or organizations) regarding escrow or other arrangements
in connection with transactions by the Trust;

(g) For transfer in accordance with the provisions of
any agreement among the Trust, the Custodian, and a futures
commission merchant registered under the Commodity Exchange Act,
relating to compliance with the rules of the Commodity Futures
Trading Commission and/or any contract market (or any similar
organization or organizations) regarding account deposits in
connection with transactions by the Trust;

(h) For the funding of any uncertificated time deposit
or other interest-bearing account with any banking institution
(including the Custodian), which deposit or account has a term of
one year or less; and

(i) For any other proper purposes, but only upon receipt,
in addition to Proper Instructions, of a copy of a resolution of
the Board of Trustees, certified by an Officer, specifying the
amount and purpose of such payment, declaring such purpose to be
a proper corporate purpose, and naming the person or persons to
whom such payment is to be made.

3.7 Delivery of Securities from Fund Custody Accounts. Upon
receipt of Proper Instructions, the Custodian shall release and
deliver Securities from a Custody Account but only in the following
cases:

(a) Upon the sale of Securities for the account of a
Fund but only against receipt of payment therefor in cash, by
certified or cashiers check or bank credit;

(b) In the case of a sale effected through a Book-Entry
System or Securities Depository, in accordance with the provisions
of Section 3.5 above;

(c) To an Offeror's depository agent in connection with
tender or other similar offers for Securities of a Fund; provided
that, in any such case, the cash or other consideration is to be
delivered to the Custodian;

(d) To the issuer thereof or its agent (i) for transfer
into the name of the Trust, the Custodian or any sub-custodian
appointed pursuant to Section 3.3 above, or of any nominee or
nominees of any of the foregoing, or (ii) for exchange for a
different number of certificates or other evidence representing the
same aggregate face amount or number of units; provided that, in any
such case, the new Securities are to be delivered to the Custodian;

(e) To the broker selling Securities, for examination in
accordance with the "street delivery" custom;

(f) For exchange or conversion pursuant to any plan of
merger, consolidation, recapitalization, reorganization or
readjustment of the issuer of such Securities, or pursuant to
provisions for conversion contained in such Securities, or pursuant
to any deposit agreement, including surrender or receipt of
underlying Securities in connection with the issuance or
cancellation of depository receipts; provided that, in any such
case, the new Securities and cash, if any, are to be delivered to
the Custodian;

(g) Upon receipt of payment therefor pursuant to any
repurchase or reverse repurchase agreement entered into by a Fund;

(h) In the case of warrants, rights or similar
Securities, upon the exercise thereof, provided that, in any
such case, the new Securities and cash, if any, are to be delivered
to the Custodian;

(i) For delivery in connection with any loans of
Securities of a Fund, but only against receipt of such collateral
as the Trust shall have specified to the Custodian in Proper
Instructions;

(j) For delivery as security in connection with any
borrowings by the Trust on behalf of a Fund requiring a pledge of
assets by such Fund, but only against receipt by the Custodian of
the amounts borrowed;

(k) Pursuant to any authorized plan of liquidation,
reorganization, merger, consolidation or recapitalization of the
Trust or a Fund;

(l) For delivery in accordance with the provisions of
any agreement among the Trust, the Custodian and a broker-dealer
registered under the 1934 Act and a member of the NASD, relating
to compliance with the rules of The Options Clearing Corporation
and of any registered national securities exchange (or of any similar
organization or organizations) regarding escrow or other arrangements
in connection with transactions by the Trust on behalf of a Fund;

(m) For delivery in accordance with the provisions of
any agreement among the Trust on behalf of a Fund, the Custodian,
and a futures commission merchant registered under the Commodity
Exchange Act, relating to compliance with the rules of the Commodity
Futures Trading Commission and/or any contract market (or any similar
organization or organizations) regarding account deposits in
connection with transactions by the Trust on behalf of a Fund;
or

(n) For any other proper corporate purposes, but only
upon receipt, in addition to Proper Instructions, of a copy of a
resolution of the Board of Trustees, certified by an Officer,
specifying the Securities to be delivered, setting forth the purpose
for which such delivery is to be made, declaring such purpose to be
a proper corporate purpose, and naming the person or persons to whom
delivery of such Securities shall be made.

3.8 Actions Not Requiring Proper Instructions. Unless otherwise
instructed by the Trust, the Custodian shall with respect to all
Securities held for a Fund;

(a) Subject to Section 7.4 below, collect on a timely
basis all income and other payments to which the Trust is entitled
either by law or pursuant to custom in the securities business;

(b) Present for payment and, subject to Section 7.4
below, collect on a timely basis the amount payable upon all
Securities which may mature or be called, redeemed, or retired, or
otherwise become payable;

(d) Surrender interim receipts or Securities in
temporary form for Securities in definitive form;

(e) Execute, as custodian, any necessary declarations or
certificates of ownership under the federal income tax laws or the
laws or regulations of any other taxing authority now or hereafter
in effect, and prepare and submit reports to the Internal Revenue
Service ("IRS") and to the Trust at such time, in such manner and
containing such information as is prescribed by the IRS;

(f) Hold for a Fund, either directly or, with respect to
Securities held therein, through a Book-Entry System or Securities
Depository, all rights and similar securities issued with respect to
Securities of the Fund; and

(g) In general, and except as otherwise directed in
Proper Instructions, attend to all non-discretionary details in
connection with sale, exchange, substitution, purchase, transfer
and other dealings with Securities and assets of the Fund.

3.9 Registration and Transfer of Securities. All
Securities held for a Fund that are issued or issuable only in
bearer form shall be held by the Custodian in that form, provided
that any such Securities shall be held in a Book-Entry System for
the account of the Trust on behalf of a Fund, if eligible therefor.
All other Securities held for a Fund may be registered in the name
of the Trust on behalf of such Fund, the Custodian, or any
sub-custodian appointed pursuant to Section 3.3 above, or in the
name of any nominee of any of them, or in the name of a Book-Entry
System, Securities Depository or any nominee of either thereof;
provided, however, that such Securities are held specifically for
the account of the Trust on behalf of a Fund. The Trust shall
furnish to the Custodian appropriate instruments to enable the
Custodian to hold or deliver in proper form for transfer, or to
register in the name of any of the nominees hereinabove referred
to or in the name of a Book-Entry System or Securities Depository,
any Securities registered in the name of a Fund.

3.10 Records. (a) The Custodian shall maintain, by
Fund, complete and accurate records with respect to Securities,
cash or other property held for the Trust, including (i) journals
or other records of original entry containing an itemized daily
record in detail of all receipts and deliveries of Securities and
all receipts and disbursements of cash; (ii) ledgers (or other
records) reflecting (A) Securities in transfer, (B) Securities in
physical possession, (C) monies and Securities borrowed and monies
and Securities loaned (together with a record of the collateral
therefor and substitutions of such collateral), (D) dividends and
interest received, and (E) dividends receivable and interest
accrued; and (iii) canceled checks and bank records related thereto.
The Custodian shall keep such other books and records of the Trust
as the Trust shall reasonably request, or as may be required by the
1940 Act, including, but not limited to Section 3.1 and Rule 31a-1
and Rule 31a-2 promulgated thereunder.

(b) All such books and records maintained by the
Custodian shall (i) be maintained in a form acceptable to the Trust
and in compliance with rules and regulations of the Securities and
Exchange Commission, (ii) be the property of the Trust and at all
times during the regular business hours of the Custodian be made
available upon request for inspection by duly authorized officers,
employees or agents of the Trust and employees or agents of the
Securities and Exchange Commission, and (iii) if required to be
maintained by Rule 31a-1 under the 1940 Act, be preserved for
the periods prescribed in Rule 31a-2 under the 1940 Act.

3.11 Fund Reports by Custodian. The Custodian shall
furnish the Trust with a daily activity statement by Fund and a
summary of all transfers to or from the Custody Account on the day
following such transfers. At least monthly and from time to time,
the Custodian shall furnish the Trust with a detailed statement, by
Fund, of the Securities and moneys held for the Trust under this
Agreement.

3.12 Other Reports by Custodian. The Custodian shall
provide the Trust with such reports, as the Trust may reasonably
request from time to time, on the internal accounting controls and
procedures for safeguarding Securities, which are employed by the
Custodian or any sub-custodian appointed pursuant to Section 3.3
above.

3.13 Proxies and Other Materials. The Custodian shall
cause all proxies if any, relating to Securities which are not
registered in the name of a Fund, to be promptly executed by the
registered holder of such Securities, without indication of the
manner in which such proxies are to be voted, and shall include
all other proxy materials, if any, promptly deliver to the Trust
such proxies, all proxy soliciting materials, which should include
all other proxy materials, if any, and all notices to such
Securities.

3.14 Information on Corporate Actions. Custodian will
promptly notify the Trust of corporate actions, limited to those
Securities registered in nominee name and to those Securities held
at a Depository or sub-Custodian acting as agent for Custodian.
Custodian will be responsible only if the notice of such corporate
actions is published by Xcitek, DTC, or received by first class mail
from the transfer agent. For market announcements not yet received
and distributed by Custodian's services, Trust will inform its
custody representative with appropriate instructions. Custodian
will, upon receipt of Trust's response within the required deadline,
affect such action for receipt or payment for the Trust. For those
responses received after the deadline, Custodian will affect such
action for receipt or payment, subject to the limitations of the
agent(s) affecting such actions. Custodian will promptly notify
Trust for put options only if the notice is received by first class
mail from the agent. The Trust will provide or cause to be provided
to Custodian with all relevant information contained in the
prospectus for any security which has unique put/option provisions
and provide Custodian with specific tender instructions at least ten
business days prior to the beginning date of the tender period.

ARTICLE IV
PURCHASE AND SALE OF INVESTMENTS OF THE FUND

4.1 Purchase of Securities. Promptly upon each purchase
of Securities for the Trust, Written Instructions shall be delivered
to the Custodian, specifying (a) the name of the issuer or writer of
such Securities, and the title or other description thereof, (b) the
number of shares, principal amount (and accrued interest, if any) or
other units purchased, (c) the date of purchase and settlement, (d)
the purchase price per unit, (e) the total amount payable upon such
purchase, and (f) the name of the person to whom such amount is
payable. The Custodian shall upon receipt of such Securities
purchased by a Fund pay out of the moneys held for the account of
such Fund the total amount specified in such Written Instructions
to the person named therein. The Custodian shall not be under any
obligation to pay out moneys to cover the cost of a purchase of
Securities for a Fund, if in the relevant Custody Account there is
insufficient cash available to the Fund for which such purchase was
made.

4.2 Liability for Payment in Advance of Receipt of
Securities Purchased. In any and every case where payment for
the purchase of Securities for a Fund is made by the Custodian in
advance of receipt for the account of the Fund of the Securities
purchased but in the absence of specific Written or Oral
Instructions to so pay in advance, the Custodian shall be liable
to the Fund for such Securities to the same extent as if the
Securities had been received by the Custodian.

4.3 Sale of Securities. Promptly upon each sale of
Securities by a Fund, Written Instructions shall be delivered to
the Custodian, specifying (a) the name of the issuer or writer of
such Securities, and the title or other description thereof, (b)
the number of shares, principal amount (and accrued interest, if
any), or other units sold, (c) the date of sale and settlement (d)
the sale price per unit, (e) the total amount payable upon such
sale, and (f) the person to whom such Securities are to be
delivered. Upon receipt of the total amount payable to the Trust
as specified in such Written Instructions, the Custodian shall
deliver such Securities to the person specified in such Written
Instructions. Subject to the foregoing, the Custodian may accept
payment in such form as shall be satisfactory to it, and may deliver
Securities and arrange for payment in accordance with the customs
prevailing among dealers in Securities.

4.4 Delivery of Securities Sold. Notwithstanding
Section 4.3 above or any other provision of this Agreement, the
Custodian, when instructed to deliver Securities against payment,
shall be entitled, if in accordance with generally accepted market
practice, to deliver such Securities prior to actual receipt of
final payment therefor. In any such case, the Trust shall bear the
risk that final payment for such Securities may not be made or that
such Securities may be returned or otherwise held or disposed of by
or through the person to whom they were delivered, and the Custodian
shall have no liability for any of the foregoing.

4.5 Payment for Securities Sold, etc. In its sole
discretion and from time to time, the Custodian may credit the
relevant Custody Account, prior to actual receipt of final payment
thereof, with (i) proceeds from the sale of Securities which it has
been instructed to deliver against payment, (ii) proceeds from the
redemption of Securities or other assets of the Trust, and (iii) i
ncome from cash, Securities or other assets of the Trust. Any such
credit shall be conditional upon actual receipt by Custodian of final
payment and may be reversed if final payment is not actually
received in full. The Custodian may, in its sole discretion and
from time to time, permit the Trust to use funds so credited to
its Custody Account in anticipation of actual receipt of final
payment. Any such funds shall be repayable immediately upon demand
made by the Custodian at any time prior to the actual receipt of all
final payments in anticipation of which funds were credited to the
Custody Account.

4.6 Advances by Custodian for Settlement. The Custodian
may, in its sole discretion and from time to time, advance funds to
the Trust to facilitate the settlement of a Trust transactions on
behalf of a Fund in its Custody Account. Any such advance shall be
repayable immediately upon demand made by Custodian.

ARTICLE V
REDEMPTION OF TRUST SHARES

Transfer of Funds. From such funds as may be available for
the purpose in the relevant Custody Account, and upon receipt of
Proper Instructions specifying that the funds are required to redeem
Shares of a Fund, the Custodian shall wire each amount specified in
such Proper Instructions to or through such bank as the Trust may
designate with respect to such amount in such Proper Instructions.
Upon effecting payment or distribution in accordance with proper
Instruction, the Custodian shall not be under any obligation or have
any responsibility thereafter with respect to any such paying bank.

ARTICLE VI

SEGREGATED ACCOUNTS

Upon receipt of Proper Instructions, the Custodian shall
establish and maintain a segregated account or accounts for and on
behalf of each Fund, into which account or accounts may be
transferred cash and/or Securities, including Securities maintained
in a Depository Account,

(a) in accordance with the provisions of any agreement
among the Trust, the Custodian and a broker-dealer registered under
the 1934 Act and a member of the NASD (or any futures commission
merchant registered under the Commodity Exchange Act), relating to
compliance with the rules of The Options Clearing Corporation and of
any registered national securities exchange (or the Commodity Futures
Trading commission or any registered contract market), or of any
similar organization or organizations, regarding escrow or other
arrangements in connection with transactions by the Trust,

(b) for purposes of segregating cash or Securities in
connection with securities options purchased or written by a Fund or
in connection with financial futures contracts (or options thereon)
purchased or sold by a Fund,

(d) for purposes of compliance by the Trust with
requirements under the 1940 Act for the maintenance of segregated
accounts by registered investment companies in connection with
reverse repurchase agreements and when-issued, delayed delivery
and firm commitment transactions, and

(e) for other proper corporate purposes, but only upon
receipt of, in addition to Proper Instructions, a certified copy of
a resolution of the Board of Trustees, certified by an Officer,
setting forth the purpose or purposes of such segregated account and
declaring such purposes to be proper corporate purposes.

ARTICLE VII
CONCERNING THE CUSTODIAN

7.1 Standard of Care. The Custodian shall be held to
the exercise of reasonable care in carrying out its obligations under
this Agreement, and shall be without liability to the Trust for any
loss, damage, cost, expense (including attorneys' fees and
disbursements), liability or claim unless such loss, damages, cost,
expense, liability or claim arises from negligence, bad faith or
willful misconduct on its part or on the part of any sub-custodian
appointed pursuant to Section 3.3 above. The Custodian's cumulative
liability within a calendar year shall be limited with respect to
the Trust or any party claiming by, through or on behalf of the
Trust for the initial and all subsequent renewal terms of this
Agreement, to the actual damages sustained by the Trust, (actual
damages for uninvested funds shall be the overnight Feds fund rate).
However, Custodian will not be liable for special incidental or
punitive damages. The Custodian shall be entitled to rely on and
may act upon advice of counsel on all matters, and shall be without
liability for any action reasonably taken or omitted pursuant to
such advice. The Custodian shall promptly notify the Trust of any
action taken or omitted by the Custodian pursuant to advice of
counsel. The Custodian shall not be under any obligation at any
time to ascertain whether the Trust is in compliance with the 1940
Act, the regulations thereunder, the provisions of the Trust's
charter documents or by-laws, or its investment objectives and
policies as then in effect.

7.2 Actual Collection Required. The Custodian shall
not be liable for, or considered to be the custodian of, any cash
belonging to the Trust or any money represented by a check, draft or
other instrument for the payment of money, until the Custodian or
its agents actually receive such cash or collect on such instrument.

7.3 No Responsibility for title, etc. So long as and to
the extent that it is in the exercise of reasonable care, the
Custodian shall not be responsible for the title, validity or
genuineness of any property or evidence of title thereto received or
delivered by it pursuant to this Agreement.

7.4 Limitation on Duty to Collect. Custodian shall
not be required to enforce collection, by legal means or otherwise,
of any money or property due and payable with respect to Securities
held for the Trust if such Securities are in default or payment is
not made after due demand or presentation.

7.5 Reliance Upon Documents and Instructions. The
Custodian shall be entitled to rely upon any certificate, notice or
other instrument in writing received by it and reasonably believed
by it to be genuine. The Custodian shall be entitled to rely upon
any Oral Instructions and/or any Written Instructions actually
received by it pursuant to this Agreement.

7.6 Express Duties Only. The Custodian shall have no
duties or obligations whatsoever except such duties and obligations
as are specifically set forth in this Agreement, and no covenant or
obligation shall be implied in this Agreement against the Custodian.

7.7 Cooperation. The Custodian shall cooperate with and
supply necessary information, by the Trust, to the entity or
entities appointed by the Trust to keep the books of account of the
Trust and/or compute the value of the assets of the Trust. The
Custodian shall take all such reasonable actions as the Trust may
from time to time request to enable the Trust to obtain, from year
to year, favorable opinions from the Trust's independent accountants
with respect to the Custodian's activities hereunder in connection
with (a) the preparation of the Trust's report on Form N-1A and Form
N-SAR and any other reports required by the Securities and Exchange
Commission, and (b) the fulfillment by the Trust of any other
requirements of the Securities and Exchange Commission.

ARTICLE VIII
INDEMNIFICATION

8.1 Indemnification. The Trust shall indemnify and hold
harmless the Custodian and any sub-custodian appointed pursuant to
Section 3.3 above, and any nominee of the Custodian or of such
sub-custodian from and against any loss, damage, cost, expense
(including attorneys' fees and disbursements), liability (including,
without limitation, liability arising under the Securities Act of
1933, the 1934 Act, the 1940 Act, and any state or foreign
securities and/or banking laws) or claim arising directly or
indirectly (a) from the fact that Securities are registered in the
name of any such nominee, or (b) from any action or inaction by the
Custodian or such sub-custodian (i) at the request or direction of
or in reliance on the advice of the Trust, or (ii) upon Proper
Instructions, or (c) generally, from the performance of its
obligations under this Agreement or any sub-custody agreement with
a sub-custodian appointed pursuant to Section 3.3 above or, in the
case of any such sub-custodian, from the performance of its
obligations under such custody agreement, provided that neither the
Custodian nor any such sub-custodian shall be indemnified and held
harmless from and against any such loss, damage, cost, expense,
liability or claim arising from the Custodian's or such
sub-custodian's negligence, bad faith or willful misconduct.

8.2 Indemnity to be Provided. If the Trust requests the
Custodian to take any action with respect to Securities, which may,
in the opinion of the custodian, result in the Custodian or its
nominee becoming liable for the payment of money or incurring
liability of some other form, the Custodian shall not be required to
take such action until the Trust shall have provided indemnity
therefor to the Custodian in an amount and form satisfactory to the
Custodian.

ARTICLE IX
FORCE MAJEURE

Neither the Custodian nor the Trust shall be liable for any
failure or delay in performance of its obligations under this
Agreement arising out of or caused, directly or indirectly, by
circumstances beyond its reasonable control, including, without
limitation, acts of God; earthquakes; fires; floods; wars; civil or
military disturbances; sabotage; strikes; epidemics; riots; power
failures; computer failure and any such circumstances beyond its
reasonable control as may cause interruption, loss or malfunction of
utility, transportation, computer (hardware or software) or telephone
communication service; accidents; labor disputes, acts of civil or
military authority; governmental actions; or inability to obtain
labor, material, equipment or transportation; provided, however,
that the Custodian in the event of a failure or delay shall use its
best efforts to ameliorate the effects of any such failure or delay.
Notwithstanding the foregoing, the Custodian shall maintain
sufficient disaster recovery procedures to minimize interruptions.

ARTICLE X
EFFECTIVE PERIOD; TERMINATION

10.1 Effective Period. This Agreement shall become
effective as of the date first set forth above and shall continue in
full force and effect until terminated as hereinafter provided.

10.2 Termination. Either party hereto may terminate this
Agreement by giving to the other party a notice in writing specifying
the date of such termination, which shall be not less than ninety
(90) days after the date of the giving of such notice. If a
successor custodian shall have been appointed by the Board of
Trustees, the Custodian shall, upon receipt of a notice of
acceptance by the successor custodian, on such specified date of
termination (a) deliver directly to the successor custodian all
Securities (other than Securities held in a Book-Entry System or
Securities Depository) and cash then owned by the Trust and held
by the Custodian as custodian, and (b) transfer any Securities
held in a Book-Entry System or Securities Depository to an account
of or for the benefit of the Trust at the successor custodian,
provided that the Trust shall have paid to the Custodian all fees,
expenses and other amounts to the payment or reimbursement of which
it shall then be entitled. Upon such delivery and transfer, the
Custodian shall be relieved of all obligations under this Agreement.
The Trust may at any time immediately terminate this
Agreement in the event of the appointment of a conservator or
receiver for the Custodian by regulatory authorities in the State of
Ohio or upon the happening of a like event at the direction of an
appropriate regulatory agency or court of competent jurisdiction.

10.3 Failure to Appoint Successor Custodian. If a
successor custodian is not designated by the Trust on or before the
date of termination specified pursuant to Section 10.1 above, then
the Custodian shall have the right to deliver to a bank or trust
company of its own selection, which is (a) a "Bank" as defined in
the 1940 Act, (b) has aggregate capital, surplus and undivided profits
as shown on its then most recent published report of not less than
$25 million, and (c) is doing business in New York, New York, all
Securities, cash and other property held by Custodian under this
Agreement and to transfer to an account of or for the Trust at
such bank or trust company all Securities of the Trust held in a
Book-Entry System or Securities Depository. Upon such delivery
and transfer, such bank or trust company shall be the successor
custodian under this Agreement and the Custodian shall be relieved
of all obligations under this Agreement. If, after reasonable
inquiry, Custodian cannot find a successor custodian as contemplated
in this Section 10.3, then Custodian shall have the right to deliver
to the Trust all Securities and cash then owned by the Trust and to
transfer any Securities held in a Book-Entry System or Securities
Depository to an account of or for the Trust. Thereafter, the Trust
shall be deemed to be its own custodian with respect to the Trust
and the Custodian shall be relieved of all obligations under this
Agreement.

ARTICLE XI
COMPENSATION OF CUSTODIAN

The Custodian shall be entitled to compensation as agreed
upon from time to time by the Trust and the Custodian. The fees and
other charges in effect on the date hereof and applicable to the
Funds are set forth in Exhibit B attached hereto.

ARTICLE XII
LIMITATION OF LIABILITY

The Trust is a business trust organized under the laws of
the State of Maryland and under a Declaration of Trust, to which
reference is hereby made a copy of which is on file at the office of
Secretary of State of Maryland as required by law, and to any and all
amendments thereto so filed or hereafter filed. The obligations of
the Trust entered into in the name of the Trust or on behalf thereof
by any of the Trustees, officers, employees or agents are made not
individually, but in such capacities, and are not binding upon any
of the Trustees, officers, employees, agents or shareholders of the
Trust or the Funds personally, but bind only the assets of the
Trust, and all persons dealing with any of the Funds of the Trust
must look solely to the assets of the Trust belonging to such Fund
for the enforcement of any claims against the Trust.

ARTICLE XIII
NOTICES

Unless otherwise specified herein, all demands, notices,
instructions, and other communications to be given hereunder shall
be in writing and shall be sent or delivered to The receipt at the
address set forth after its name herein below:

To the Trust:
Advance Capital I, Inc.
One Towne Square Suite #444
Southfield, MI 48076
Attn: Accounting Dept.

Telephone: (248) 350-8543
Facsimile: (248) 350-0115

To the Custodian:

The Fifth Third Bank
38 Fountain Square Plaza
Cincinnati, Ohio 45263
Attn: Area Manager - Trust Operations
Telephone: (513) 579-5672
Facsimile: (513) 579-5444

or at such other address as either party shall have provided to the
other by notice given in accordance with this Article XIII. Writing
shall include transmission by or through teletype, facsimile, central
processing unit connection, on-line terminal and magnetic tape.

ARTICLE XIV
MISCELLANEOUS

14.1 Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of Ohio.

14.2 References to Custodian. The Trust shall not
circulate any printed matter which contains any reference to
Custodian without the prior written approval of Custodian, excepting
printed matter contained in the prospectus or statement of additional
information or its registration statement for the Trust and such
other printed matter as merely identifies Custodian as custodian
for the Trust. The Trust shall submit printed matter requiring
approval to Custodian in draft form, allowing sufficient time for
review by Custodian and its counsel prior to any deadline for
printing.

14.3 No Waiver. No failure by either party hereto to
exercise and no delay by such party in exercising, any right
hereunder shall operate as a waiver thereof. The exercise by either
party hereto of any right hereunder shall not preclude the exercise
of any other right, and the remedies provided herein are cumulative
and not exclusive of any remedies provided at law or in equity.

14.4 Amendments. This Agreement cannot be changed orally
and no amendment to this Agreement shall be effective unless
evidenced by an instrument in writing executed by the parties hereto.

14.5 Counterparts. This Agreement may be executed in one
or more counterparts, and by the parties hereto on separate
counterparts, each of which shall be deemed an original but all of
which together shall constitute but one and the same instrument.

14.6 Severability. If any provision of this Agreement
shall be invalid, illegal or unenforceable in any respect under any
applicable law, the validity, legality and enforceability of the
remaining provisions shall not be affected or impaired thereby.

14.7 Successors and Assigns. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto
and their respective successors and assigns; provided, however, that
this Agreement shall not be assignable by either party hereto without
the written consent of the other party hereto.

14.8 Headings. The headings of sections in this
Agreement are for convenience of reference only and shall not affect
the meaning or construction of any provision of this Agreement.

IN WITNESS WHEREOF, each of the parties hereto has caused
this Agreement to be executed and delivered in its name and on its
behalf by its representatives thereunto duly authorized, all as of
the day and year first above written.

ATTEST: Advance Capital I, Inc.

/s/ Julie Katynski By: /s/ John Shoemaker

Its: President

ATTEST: THE FIFTH THIRD BANK

By:_____________________

Its:____________________

Dated: August 11, 1999

EXHIBIT A
TO THE CUSTODY AGREEMENT BETWEEN
Advance Capital I, Inc.
AND THE FIFTH THIRD BANK

August 11, 1999

Name of Fund Date

Advance Capital I, Inc. - Equity Growth Fund August 11, 1999
Advance Capital I, Inc. - Bond Fund August 11, 1999
Advance Capital I, Inc. - Balanced Fund August 11, 1999
Advance Capital I, Inc. - Retirement Income Fund August 11, 1999
Advance Capital I, Inc. - Cornerstone Stock Fund August 11, 1999

Advance Capital I, Inc.

By: /s/ John Shoemaker

\ Its: President

THE FIFTH THIRD BANK

By: _______________________

Its: ______________________

Dated: August 11, 1999

EXHIBIT B
TO THE CUSTODY AGREEMENT BETWEEN
Advance Capital I, Inc.
AND THE FIFTH THIRD BANK

August 11, 1999

AUTHORIZED PERSONS

Set forth below are the names and specimen signatures of
the persons authorized by the Trust to Administer each Custody
Account.

Name Signature

John C. Shoemaker /s/ J. Shoemaker
Robert J. Cappelli /s/ Robert J. Cappelli

SIGNATURE RESOLUTION

RESOLVED, That all of the following officers of
Advance Capital I, Inc. and any of them, namely the Chairman,
President, Vice President, Secretary and Treasurer, are hereby
authorized as signers for the conduct of business for an on behalf
of the Funds with THE FIFTH THIRD BANK:

John C. Shoemaker PRESIDENT /s/ J. Shoemaker

Robert J. Cappelli VICE PRESIDENT /s/ Robert J. Cappelli

Charles J. Cobb VICE PRESIDENT /s/ Charles J. Cobb

TREASURER ______________________

Kathy J. Harkleroad SECRETARY /s/ Kathy J. Harkelroad

ASSISTANT TREASURER ______________

ASSISTANT SECRETARY _______________

The undersigned officers of Advance Capital I, Inc. hereby certify
that the foregoing is within the parameters of a Resolution adopted
by Trustees of the Trust in a meeting held April 30, 1999, directing
and authorizing preparation of documents and to do everything
necessary to effect the Custody Agreement between Advance Capital I,
Inc. and THE FIFTH THIRD BANK.

By: /s/ J. Shoemaker
John C. Shoemaker
Its: President

EXHIBIT C
TO THE CUSTODY AGREEMENT BETWEEN
Advance Capital I, Inc. AND THE FIFTH THIRD BANK

August 11, 1999

MUTUAL FUND CUSTODY FEE SCHEDULE

BASIC ACCOUNT CHARGE

FUND SIZE:

Less than $25MM .01%
$25MM - $100MM .0075%
$100MM - $200MM .005%
Over $200MM .0025
Minimum Annual Fee $2,400.00

TRANSACTION FEES

DTC/FED Eligible Trades $9.00
DTC/FED Ineligible Trades $25.00
Amortized Security Trades $25.00
Repurchase Agreements (purchase and maturity) $9.00
Third Party Repo's (purchase and maturity) $9.00
Physical Commercial Paper Trades $25.00
(purchase and maturity)
Book-Entry Commercial Paper Trades $9.00
(purchase and maturity)
Options, each transaction $25.00
Amortized Security Paydowns $5.00

A transaction is a purchase, sale, maturity, redemption, tender,
exchange, dividend reinvestment, deposit or withdrawal of a secury
(with the exception of Fifth Third Certificates of Deposit,
Commercial Paper & Repo)

MISCELLANEOUS FEES

Wire Transfers $7.00
Check Disburments $6.00

/s/ J. Shoemaker
John C. Shoemaker